Landlords and letting agents can sign up to a new rent referencing service run by one of the country’s largest credit rating agencies.
Experian has launched the service to track tenant buy to let payment profiles.
The private lettings industry lacks an independent and effective way of checking if a tenant is a reliable payer – and as more tenants skip rent and fall in to arrears and debt problems, banks and credit card firms want to identify risky customers.
Tenants who don’t pay their rent will find credit harder to find and more expensive as their credit rating drops, while landlords can spot likely bad payers before offering a tenancy agreement.
Debt charity CCCS has revealed that the number of private renters in debt problems has risen by 30% in the past three years, while figures from LSL Property Services, which owns the UK’s largest lettings agency network, showed 10.7% of all rent was late or unpaid at the end of January.
This is slightly over the monthly average of 10.2% of all rent in arrears over the past 12 months.
Experian reckons the service will take around 12 months to get off the ground as landlords and letting agents sign up and alter their tenancy agreements to allow payment data sharing.
Paul Vescovi, UK and Ireland managing director of Experian credit services, said: “With several million people living in privately rented accommodation, a significant percentage of the population could be missing out on mainstream, low-cost credit because lenders do not currently have a comprehensive picture of their financial track record.
“The rental exchange will strengthen people’s credit histories, helping them to access a wider range of credit deals.”
The scheme is already supported by one of the UK’s largest private landlords – Grainger plc.
Executive director Nick Jopling said: ”As renting increasingly becomes a lifestyle choice for many Britons, it is important that the process for credit scoring accurately reflects a tenant’s status and rent payment history to enable them to have fair access to affordable credit and services.”
The mainstream landlord and the tenants may seem benefits and some disbenefits, but where there is a dispute and a non mainstream landlord, the risks to a tenant can be catastrophic ” do as I say or you’ll get a bad reference.
It might feed a need and demand for the cash only landlord.
There must be scheme of safeguards to avoid this to suspend negative ratings and investigate them.
And in my view a system similar to the summary of rights for service charges where the tenants rights are stated and the landlords address under section 47/48 must be included. at the front of a tenancy and rents are not due until the landlord complies.
Comment by leaseholdanswers — 16/3/2012 #
I can see some benefits for landlords and obviously a commercial benefit for Experian.
But to attempt to claim it would benefit tenants is not serious…
Comment by jjlandlord — 16/3/2012 #