PropTech startup RentalStep has questioned whether long-term lifestyle tenants should have to go through the traditional referencing process when moving between rental properties.
The move towards long-term and lifestyle renting means that the lettings industry ‘needs to provide a more streamlined and suitable process for renters and landlords’.
This call comes as the private rented sector continues to grow considerably. In the most recent English Housing Survey, for example, it was revealed that a fifth (20%) of all households reside in the private rented sector, while renting privately is now the largest housing tenure in London.
What’s more, Your Move research recently suggested that approximately a third of current tenants have already rented for six years or more, while James Brokenshire – the new Housing Secretary – announced that the government will soon be consulting on options to support landlords who want to offer longer tenancies.
Mike Georgeson, founder and chief executive of RentalStep, said that with many tenants now renting privately for a decade or longer, they have the chance to build up a comprehensive rental history. “It therefore seems logical that all this information is stored in one central place and that tenants and landlords don't have to undertake a lengthy, admin-heavy and sometimes expensive traditional referencing process every time someone wants to move home,” he explained.
He said that tenants who are renting long-term but moving around frequently to experience different locations shouldn’t be required to constantly resubmit the same information.
RentalStep, one of the winners of HM Treasury's Rent Recognition Challenge, has created TenantPassport, a free digital rental history profile, to try and solve this issue. The profile includes property, employment and reference information, which can be shared with landlords and letting agents.
In addition, the platform offers tenants the chance to have their rental payment history contribute towards their credit score.
“The cost of referencing prospective tenants is something all landlords need to consider,” Georgeson added. “From next year, it will no longer be possible to charge tenants upfront fees and it's widely expected that the cost of the traditional referencing process will fall to landlords.”
“As the market changes to provide a fairer deal for tenants, landlords must adapt and think about their own costs and whether it makes sense to pay a fee each time a tenant needs referencing,” he went on.
“We all need to embrace the shift towards lifestyle renting and provide an easier way for tenants to move between properties, while allowing landlords to find fully referenced tenants in one place with less administration and at a fraction of the cost.”