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Rent payments to go on tenants’ credit files

By the end of 2012, tenants will have details about their rental payments included in their credit file under an initiative launched by Experian, one of the UK’s three credit reference agencies.

Under the new scheme, tenants who consistently pay their rent on time will benefit from an enhanced credit rating, thus boosting their chances of being granted mortgages, loans, credit cards and future tenancy agreements. Conversely, tenants who have paid their rent late will find that their credit score falls – something that will show up on future credit checks by banks, landlords or letting agencies.

Tenants living together under a joint tenancy agreement will also have to keep on their toes, as late joint rent will also count against them, regardless of who is to blame.

Reaction to the announcement has been mixed, with experts coming out both for and against the proposal. Quoted in The Guardian, Sian Williams, head of Transact, said “this could be a very useful tool for allowing [renters] to access a wider range of services at a more affordable cost.” She concludes that it is a “very welcome development for many people living in private rented accommodation, who until now have often found it difficult to build a credit history.”

Dan Plant, a money analyst for MoneySavingExpert.com, is rather more reserved in his reaction to the initiative: “This adds to the ever-expanding pool of information banks can use to make a snap judgement about you, and it’s not even about how you’ve previously borrowed money. This makes it absolutely crucial you pay your rent on time, and regularly check credit files to make sure everything that’s reported is true – and if not, get it put right.”

Experian is now beginning the process of talking to major letting agents and landlords to encourage them to state in tenancy agreements that they can share tenants’ payment history. If successful, the data should start to appear by the end of the year.

At Reside, our tenants are referenced through Endsleigh, a branch of of Experian.

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Will changes to EPC law be delayed yet again?

Back in January, we blogged about the ongoing saga concerning changes to EPC law in England. Letting and estate agents are required by law to commission an Energy Performance Certificate prior to marketing a property, but current legislation regarding how much of the report must then be shared with clients is very lax. The EPC gives an indication of how energy efficient a property is, and what can be done to improve its rating and decrease fuel costs.

Since early 2011 the government has been promising to tighten up EPC laws, but the proposed changes have been consistently delayed and pushed back. With the latest deadline of April 6th coming up shortly, it remains to be seen whether or not they will be postponed yet again.

The warning signs look ominous; last week, agents were due to be issued with guidance on the upcoming changes by the Communities and Local Government department. This did not happen. However, Estate Agent Today reports that a government insider has indicated that the changes will ‘definitely go ahead on April 6‘, despite the fact that the redesigned EPC has not yet been approved.

It is widely believed that, after April 6th, letting and estate agents will be required to attach the entire first page of the new-look EPC to all property particulars, although no guidance has yet been issued about online marketing.

While many believe that this marks an important step towards encouraging tenants and homeowners to increase the energy efficiency of their home, others see the EPC as something that is ignored by the vast majority of people moving into a new home. A recent report in The Guardian suggests that ‘nearly four-fifths of people (79%) who had received an EPC when buying or renting a new home had not acted on any of its recommendations to make it more energy-efficient and thereby save money’. The government will be hoping that the redesigned EPC, with a front page that clearly and simply details recommendations for improving the property’s energy efficiency, will have an impact on the amount of people who then act on the recommendations.

At Reside, we have always made the entire EPC available to landlords and tenants and we will continue to do so after April 6th. Examples of our EPCs can be found on the property pages of our website.

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