Tech firms bag £2m to help UK's renters buy a house
Renters unable to get a mortgage because of their lack of credit rating will be able to boost their chances through one of three new start-ups backed by the government.
A share of £2 million in government funding has been awarded to three innovative start-ups with a solution. The winners offer apps for renters to record and share their rent payment data, helping boost their credit score
CreditLadder, Bud, and RentalStep have each won a share of a £2 million prize fund, as part of the government’s Rent Recognition Challenge.
Bud is building an AI-driven rental recognition tool. It will allow banks to integrate it into their apps so that people can use their rental history to help them do things like apply for a mortgage.
CreditLadder’s app allows tenants to report their rent payments. Landlords and Letting Agents can also introduce their tenants to the platform.
RentalStep is a landlord-tenant matching platform, which allows landlords to purchase a tenancy management service through the platform, and rental payments to be tracked and reported.
The Dragons’ Den-style challenge tasked entrepreneurs to create a simple way for renters to record and share their rent payment data, to help them improve their credit score.
The three winners will use their funding to further develop their businesses.
"Monthly rent is often the biggest expense that people face. Yet most lenders are unable to take it into account when working up a credit score," said John Glen, Economic Secretary to the Treasury.
"Three pioneering start-ups have found a solution, and we’re giving them the investment and support they need to help millions of renters across the country achieve their dream of owning a home."
Launched in December 2017, the Rent Recognition Challenge provided an initial round of grant funding to six budding businesses to help turn their ideas into a workable product. An expert panel of judges then whittled the six down to three, who today receive a final package of government funding.
Charlotte Crosswell, chief executive of Innovate Finance and one of the challenge's judges, added: "We are delighted to support the Rent Recognition Challenge and address this important issue of helping renters as they look to establish a credit history, helping their journey towards securing a mortgage in the future.
"The Fintech sector has proven it can provide credible, innovative solutions and we are delighted that government has recognised that Fintech companies have a significant role to play in this market."