The government has challenged Britain’s fintech innovators to develop new apps that will help renters boost their credit scores and get on the housing ladder, with £2m set aside for winning applicants.
First announced by the chancellor in November’s Autumn Budget, the prize money will be split between an initial six firms which propose the most promising new applications, or expanded existing ones, that enable rental tenants to record and share rental payment data with banks and credit reference agencies.
The first round will see £100,000 allocated to each team to develop a prototype product.
A panel of fintech experts will then select the best three to four teams, who will receive additional funding to bring their ideas to market.
Applications for the Rent Recognition Challenge will open in January 2018, and close in March. Development will then run from April 2018 and conclude in October.
Commenting on the competition’s launch, Stephen Barclay, economic secretary to the Treasury, said Britain’s fintech innovators had the opportunity to help renters improve credit ratings and get on the housing ladder.
“People’s monthly rent is often their biggest expense, so it makes sense for it to be recognised when applying for a mortgage. Without a good credit score, getting a mortgage can be a real struggle,” he said.
“Most lenders and credit reference agencies are unable to take rental data into account, because they don’t have access to it. The Rent Recognition Challenge will challenge firms to develop an innovative solution to this problem and help to restore the dream of home ownership for a new generation.”
The Treasury has launched the competition to help renters with a history of meeting rental payments get their record recognised in credit scores and mortgage affordability assessments.
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