Fintech is about to help first-time buyers get on the property ladder, with Rent Recognition Challenge for startups

 
Lynsey Barber
Follow Lynsey
Home Ownership Falls To Its Lowest Level In 30 Years
Rent payments could soon count when you apply for a mortgage (Source: Getty)

You spend years paying rent, every month and on time, and yet when it comes to getting a mortgage, that all means nothing.

Banks and other lenders do not take this record of prudent financial behaviour into account when considering first-time buyers, but efforts to change that just came a step closer.

Read more: A robot could soon be investing in bitcoin on your behalf

A new competition has been launched to get innovative startups using technology to help renters use this payments history as a record of credit worthiness. The idea is that a tool or service can be used by lenders and credit reference agencies as part of an assessment for a mortgage.

First announced in the Autumn Budget, the Rent Recognition Challenge is now open for entries, with a potential prize of £2m for fintechs working on this idea.

Six proposals will get £100,000 each to get started on a prototype between March and October, after which that will be narrowed down to three by a panel of judges with more cash up for grabs.

Read more: Here's what fintech startups think of delays to Open Banking

Wider efforts to get first-time buyers on to the property ladder have included a cut to stamp duty, though the Royal Institute for Chartered Surveyors yesterday said the policy was having little impact.

It's estimated that by 2027 a deposit of £250,000 will be needed to buy a first home.

Related articles