A sum of £2m is on offer to entrepreneurs who can develop an application for Britain’s renters to record and share their rent payment data.
The UK Treasury is offering the investment to a starting business to cover the 11million renters to record and share data, with the hope of helping renters improve their credit scores and chances of obtaining a mortgage.
The Rent Recognition Challenge, a £2m prize fund, was announced in the Autumn Budget 2017 and the challenge is open to all.
Under the challenge, FinTech firms should develop new applications, or improve existing ones, to enable rental tenants to record and share their rental payment data with lenders and credit reference agencies.
A panel of experts from the FinTech sector will select the winning bids.
An initial round of grant funding will be provided to six promising proposals to turn the ideas into a workable product. They will receive £100,000 each to support the development of a prototype product.
Judges will then shortlist three to four teams, who will receive further funding and support to bring their ideas to market.
The challenge will open to applications early in January 2018 and will close to applications in March 2018. Development will begin in April 2018 and conclude in October 2018.
The Treasury said that the competition will be held as part of its measures to help first-time buyers get on the property ladder.
“Mortgage lenders and credit reference agencies are often unable to take rental payment history into account as they do not have access to this data. This competition will support firms to solve this problem,” it said.
Economic Secretary to the Treasury Stephen Barclay said: “People’s monthly rent is often their biggest expense, so it makes sense for it to be recognised when applying for a mortgage. Without a good credit score, getting a mortgage can be a real struggle.
“Most lenders and Credit Reference Agencies are unable to take rental data into account because they don’t have access to it. The Rent Recognition Challenge will challenge firms to develop an innovative solution to this problem and help to restore the dream of homeownership for a new generation.”