A date has been set for MPs to debate whether rental payments should be sufficient proof of mortgage affordability.
A petition on the Parliament website had reached 147,307 signatures when it was closed in May ahead of the General Election, but the Treasury had also responded stating: “Lenders must consider a range of factors when assessing a mortgage application. Meeting rental payments is not sufficient in itself to demonstrate affordability over the lifetime of the loan.”
Typically, any e-petitions on the Parliament website that reach more than 100,000 signatures are later debated in the House of Commons.
MPs will debate the proposal on October 23, but this doesn’t mean anything will change, especially as this is something a lender rather than Government would usually decide.
The petition, attributed to Jamie Jack Pogson, said: “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 handouts, 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.”
Sheraz Dar, chief executive of CreditLadder.co.uk, which helps tenants improve their credit rating, said: “This shows the Government is serious about getting more tenants on to the property ladder. It originally said it was not going to enable parliament to debate the petition after the snap election, but has now changed its mind.
“Millions of UK tenants pay billions of pounds in rent every year and yet it doesn’t count towards their credit history unless they’ve signed up with a service like ours.
“The Government said in their General Election manifesto that they wanted to make the UK a nation of home owners again, and this is clearly part of that commitment.”
This has to be a good idea to debate this. Whilst I know many people will disagree with me, I would look a the bigger picture.
For many house buyers their property represents the only money or savings they will accumulate in a lifetime of working, and it means efffectively that when they retire they at least have a property they own to live in.
If as a country we continue to deny hundreds of thousands of people the opportunity to get on the ownership ladder, and most of those people remain trapped in renting all their working lives, who is going to pay all of the rents when they retire?
The state is currently building up a colossal future financial burden for itself!
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I agree up to a point. I do however feel that people these days are trying to live beyond their means. Instead of ‘climbing the ladder’ people want to skip steps and it ultimately leads to a wobble or a fall.
If the person paying £70,000 in rent had bought a small 1 bedroom flat instead of holding out for a nice 3 bedroom semi-detached house (for example) he would have most of that £70,000 plus any property increase in value to then buy the nice house he now wants.
I just think the generation of today are too short sighted and want everything now.
I realise its a very generalist view, however I worked at a supermarket, saved for a few years and was able to buy a property. A lot of people out there earn a lot more than an ASDA worker who are claiming its impossible to buy a property!
Just a thought.
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I really think that it should count towards it, but only if you have been renting at a higher amount than the monthly payments are likely to be for in excess of 12 months. Obviously Tenants don’t need to pay buildings insurance, or replace appliances that come with the property etc, so having a £100-150 per month ‘buffer’ between the rent and the mortgage payments would help now owners budget to start with. I still think income multipliers should be used as well, but if a tenant is able to pay £800 per month for a rental property, then why can’t they pay £600 per month for a mortgage? I can’t understand some of my tenants who are paying £1k+ per month! It all comes down to deposits as well I suppose…
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There needs to be creative thinking to help 1st Time Buyers… and in my view, this is a very positive step in the right direction.
I accept that there can be a tendency not to want to start on the lower rung of the property ladder and work one’s way up however to simply ignore the problem that 1st Time Buyers are facing is akin to covering your ears and singing lalalalalalaaaaaaaa
Government and Lenders have a responsibility to look at ways to help the Generations that follow and not just deal with what is sitting in front of them.
In reality… those that should and can do something, like the Government and Lenders will do **** All! …..and that is why our country is currently stuttering along and young/1st Time Buyers feel pretty helpless and forgotten!
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