Oakhill logo

Experian: 1.7 million tenants frustrated in their home buying plans

Search for properties

To buy or to rent?

Property type

Minimum price

Maximum price

Minimum bedrooms

Mon 25 Jan 2016

Experian: 1.7 million tenants frustrated in their home buying plans

 

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

Home ownership has been considered an integral part of ‘British culture’ for generations, yet Experian’s survey of nearly 1,500 private renters in the UK suggests 1,655,680 tenants are frustrated first-time buyers.

One in five (18%) private tenants don’t believe they would be accepted for a mortgage so feel renting is their only option, while a tenth (10%) have struggled to raise a deposit and consequently been forced to delay their plans to buy. A further 5% have had to prolong their time renting as they’ve been held up in securing a mortgage.

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 ease their difficulties when they buy a home.

Experian’s Jonathan Westley said: “Many would-be first-time buyers face the challenge of saving for a deposit on a home while paying rent each month. While our research also shows that a significant amount of people are happy to rent in the long-term, whether it’s because they enjoy a good relationship with their landlord or the flexibility of rented accommodation.

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.

25% of those surveyed intend to buy a place of their own sooner rather than later. Nine per cent are currently saving for a deposit and believe they will be able to buy within the next 18 months, while 16% reckon they will need between two and five years to build up the required deposit. A third of private tenants are content to rent and have no plans to buy a home of their own in the next five years.

Would-be first-time buyers who have been frustrated in their attempts to get onto the housing ladder are more likely to be single parents or couples with children. These tenants either doubt they would get a mortgage or have had difficulty securing one, or have struggled to get a deposit together. Three-quarters of this group (74%) would like to see rental payments contribute to their credit report.

The greatest appetite for including rental payment data on credit reports is among people who are looking to buy in the next five years. Nine out of 10 people (91%) in this group, which includes many couples without dependent children, recognise the importance of a good credit report and 83% would like to see rental payment data added to it.

 

People who are happy to rent tend to live alone or only with other adults and are less likely to see rent as ‘dead money’ than private tenants as a whole. One in four (26%) of satisfied renters disagree when asked if renting is a waste of money, compared to 16% of all private renters.