MPs are to debate whether rent payments are enough proof that a borrower can afford their mortgage repayments, following a petition on the Gov.uk website.
The petition, launched earlier this month, has reached 144,079 signatures – beyond the required 100,000 to be debated by MPs.
There is no guarantee that the debate will create rules that tenants can use their rent payments to prove mortgage affordability, but it is clear that many support the idea.
The petition, attributed to Jamie Jack Pogson, says: “Since living on my own, I have paid £70,000+ in rent on time, yet still struggle to get a mortgage.
“Unless you’re getting hand-outs, wealthy or in receipt of inheritance, it’s almost impossible. I want paying rent on time to be recognised as evidence that mortgage repayments can be met.”
Parliament will now debate the call for rent payments to be used to prove mortgage affordability, but a date has not yet been set.
Commenting on the proposal, the Head of Personal Finance at lender Together, Pete Ball, says: “The impressive surge in popularity of this petition is clear evidence of the growing frustration among thousands of renters that aspire to own their first home, but are struggling to obtain a mortgage from the mainstream banks.
“Many traditional lenders apply a rigid criteria, and applicants need to tick all the right boxes, so proof of rental payments isn’t necessarily taken into account as part of the application process.”
He continues: “It’s estimated that, by 2025, there will be 7.2m households in the UK which are privately rented – a significant rise from the 5.4m recorded in 2015. And, as this petition clearly demonstrates, there is a need to compile more detailed data on the credit profile of these individuals, which will then help lenders to assess their applications when they look to obtain a mortgage.
“If there is a debate following the petition and it leads to new and improved measures in this space, that will be a positive step for both lenders and these aspiring homeowners.”
Landlords, do you support the calls for rent payments to prove a borrower can afford a mortgage?