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Tenants ‘unfairly miss out on credit’

Tenants’ regular rent payments should be recorded on their credit score and used as proof to lenders that mortgage demands can be met, MPs are to be told.

At present, mortgage applicants are unable to rely on rent payment history as proof that they would be safe to lend to when buying a home.

A debate is being held in Parliament on Monday following a petition which aimed to raise awareness of the issue.

The government has said that lenders should consider a range of factors.

The petition, signed by 147,307 people, argued that “paying rent on time [should] be recognised as evidence that mortgage repayments can be met”.

Campaigners have argued that rent payment history should be included on a tenant’s credit score, even though it is not strictly a form of credit.

Steve Burrows, managing director of LateRent which offers a service to landlords, said: “It is no secret that owning a property has become a distant prospect for many and the private rental sector continues to grow as a result. 

“It is therefore oddly out of step that tenants are unable to utilise rental payments as part of their credit profile – particularly as the government increasingly seeks to promote homeownership across the UK.”

Conservative MP Paul Scully, who will introduce and lead the debate on Monday, said that he was sympathetic to those who were paying more for credit, or being turned down, simply because they had been renting a home. This was particularly true when monthly rent was higher than typical monthly mortgage repayments.

“It is clear that in many cases if someone is renting, they can afford the equivalent mortgage,” he said.