Barriers of buying frustrate private renters

Posted 22 January 2016 by Helen Christie

According to Experian research, one in three private tenants have had to put their plans to buy on hold and remain in rented accommodation longer than planned...

While many people dream of owning their own home, a survey of nearly 1,500 private renters has shown that one in five (18%) of private tenants do not believe that they would be accepted for a mortgage, and 10% of tenants have struggled to raise a deposit, therefore are forced to delay their plans to buy. Securing a mortgage has delayed a further 5% which has meant they have had to prolong their renting time.

Despite making regular payments for their housing, private renters don’t see this reflected on their credit report in the same way mortgage payers do. To help private renters to get a mortgage, access finance or prove their identity online, Experian has developed the Rental Exchange. It allows rental payment information to be submitted to Experian, which will help strengthen renters’ credit histories and aims to ease their difficulties when they buy a home.

Experian’s Jonathan Westley says, “Many would-be first-time buyers face the challenge of saving for a deposit on a home while paying rent each month. Yet the rent paid by tenants isn’t reflected on credit reports in the same way homeowners benefit from making regular mortgage payments. By adding this data through the Rental Exchange, people aiming to buy can build a stronger credit history to help them get a more competitive mortgage rate, while long-term renters can prove their identity when they apply for online services.”

More than 700,000 social housing tenants are in line to benefit from the Rental Exchange by Experian, working in partnership with Big Issue Invest, the social investment arm of The Big Issue.

Out of those surveyed, 25% intend to buy a place of their own sooner rather than later. 9% are currently saving for a deposit with the aim of buying within the next 18 months, and a further 16% feel they will need between two and five years to get the required deposit. A third of renters are content to continue renting, and have no plans to buy a home in the next five years.

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