26th October 2018: Former cabinet minister Justine Greening gave tenants across the UK added hope this week when she called for the Prime Minister to support a bill currently going through parliament that will require lenders to take rental payment track records into account when making lending decisions.
“If you pay a mortgage every month it counts towards your credit history but if you pay rent every month it doesn’t which just isn’t fair,” she said.
“But we can fix this for 15 million renters with the Creditworthiness Assessment Bill, which is something that could give affordable credit to millions more renters across the country.”
Greening made the comments during Prime Minister’s Questions in the Commons. In answer, Theresea May dropped a heavy hint that measures to support the Bill were likely to appear in the budget on Monday (29th October).
The CreditWorthiness Assessment Bill is the brainchild of Big Issue magazine founder Lord Bird who wants to expand the range of payments that can be added to tenants’credit histories in order to help them out of the poverty trap.
His Creditworthiness Assessment Bill has already sailed through the Lords and is to be debated again today (26th October) in the Commons before becoming law early next year.
How it works
The Bill seeks to formalise what is already happening on the ground and will enshrine in law for those who struggle to prove their creditworthiness the right to have both their rent and council tax payments added to their payment histories. This will provide lenders with more information about their ability to make payments on time, and improve their creditworthiness.
CreditLadder is confident that the bill stands a good chance of passing through parliament and becoming law later next year, assuming the complications of Brexit or a General Election don’t get in the way.
Cross party support
During its passage through the Lords and Commons this year the billhas so far received cross party support including enthusiastic encouragement from several former and current government ministers, including Greening.
The bill will introduce the changes by inserting an amendment into the Financial Services and Markets Act 2000.