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UK property rental payments are changing, and the Government must keep up

LONDON, UK (Centus) - The Residential Landlords Association (RLA) has every right to be concerned that past rental payments are not being used to calculate credit scores for those intent on entering the housing market. A study of 3,000 landlords found that 61 per cent of them would support a change in UK law that enabled rental payment histories to be included in tenants’ credit ratings. However, it demonstrates a wider problem with rental law- it needs to be updated to reflect modern trends of payments.

As the RLA said, it would be a win-win result for both landlords and tenants. Currently, there is no record of rent being paid on time on tenants’ credit scores. If the law was updated to include this history, it would be a significant boost to their chances of entering the housing market. Renting is now a first-time option for many people in the UK, particularly millennials. A report issued by Knight Frank discovered that around 5 million households in Britain are privately rented. That figure is set to increase to 5.79 million by 2021, according to the estate agency, which commissioned a YouGov survey of more than 10,000 tenants and spoke to 26 major investors. If implementing this measure can improve people’s credit histories, it is one small step towards enabling more renters to be able to purchase their own home if they have a record of maintaining rental payments.

Fortunately for the rental sector, Parliament will be debating this issue soon. A petition of 147,307 signatures has attracted widespread support, which is above the required threshold for Members of Parliament to discuss any matter presented to them in this format. It reflects the RLA’s campaign for rental payments to be included in calculating credit ratings. The debate itself will be taking place in the House of Commons on October 23rd 2017. This is a positive step from the RLA that deserves to be welcomed by all. The rental market has been condemned in recent years for charging tenants ridiculous prices and it is good to witness landlords pushing for sensible changes.

Yet there is more that the Government can do to reform the rental industry. With the expansion of digital payments in recent years, there are new methods of paying bills. Co-living London property developer The Collective is allowing tenants to pay their deposits in Bitcoin for the first time in the residential homes market’s history. The organisation’s Chief Executive, Reza Merchant, said she recognises the potential of this cryptocurrency to value and transact for goods globally. As this payment method develops into the next decade, the law will need to be modernised so that it can support and sensibly regulate this digital currency.

It appears that the Government has embraced a decisive first step towards updating rules regarding the rental sector when it comes to credit scores. But if schemes like paying for deposits in Bitcoin roll out across Britain, then this is only the beginning of more legislation that can be introduced to keep abreast with fluctuations in this industry.  

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