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Rental payments should be considered in mortgage assessments, Liz Truss says


Tory leadership contender Liz Truss has vowed to ensure rental payments are considered as part of mortgage assessments under a plan to “unlock homeownership”.

The foreign secretary, who is the frontrunner to succeed Boris Johnson in No 10, also confirmed that she would scrap the Conservatives’ 2019 manifesto to build 300,000 homes a year by the mid-2020s.

The pledges come amid a decline in homeownership in England – from 75 per cent of households in 2003 to 65 per cent in 2019-20, according to the House of Commons library.

The fall is particularly pronounced in younger age groups, with an 18 per cent dip over the same period for those aged between 25 and 34 amid surging house prices and rental payments.

Despite the Tories being in power for more than 12 years, the government made clear in June that “soaring house prices, stringent mortgage lending restrictions and high deposit requirements are hampering the ambition of many young people who want to own their own homes”.

They added: “Over 50 per cent of today’s renters could afford the monthly cost of a mortgage but various constraints mean only 6 per cent could immediately access a typical first-time-buyer mortgage.”

Seeking to help some renters who can afford deposits, Ms Truss said she would use an upcoming government review of the mortgage market to allow rent payments to be used as part of the affordability assessment.

Her campaign highlighted a poll by YouGov in February that showed three quarters of the public think that banks and other mortgage lenders should accept a history of regular rent payments as proof of affordability – a view widely held across all voting groups.

Alicia Kennedy, director of the campaign group Generation Rent, told The Independent: “Millions of renters pay a huge proportion of their income each month on rent, on time and without ever missing a payment. So it is welcome, and about time, that rental payments could be considered as part of a mortgage assessment.”

But she pointed out that renters would still find it “very difficult to save for a deposit for a home of their own due to extortionate rents and the cost of no-fault evictions”.

“The new prime minister should address this and ensure landlords compensate renters with relocation payments each time they make a renter leave their home when they have done nothing wrong,” she added.

Polly Neate, the chief executive of chairty Shelter said: “Mortgage affordability checks are not the only barrier to homeownership – half of private renters don’t have any savings and rents are the highest on record. The truth is many renters are closer to homelessness than homeownership.

“Building more homes is central to solving the housing crisis, but only if they are the good quality, genuinely affordable homes that local communities desperately need. For decades successive governments have failed to build enough social housing, and have instead wasted time on expensive homeownership schemes that only help a few, or worse yet push house prices higher.

“Fewer than 6,000 social homes were built last year while more than a million households sat on waiting lists. Whoever is the next prime minister must put building social homes at the heart of any planning reforms and give the people in need of an affordable, secure home a voice too.”

Unveiling the policy, Ms Truss said: “People are getting older and older before they get their foot on the property ladder.

“It’s a problem not just for the Conservative Party, but for the future of the country. As prime minister I would break down barriers and unlock the opportunity of homeownership for millions of hardworking renters across the nation.”

Despite the Conservative manifesto pledge to build 300,000 houses a year by the mid-2020s, Ms Truss is also planning to “rip up the red tape that is holding back housebuilding” by scrapping the target.

“Truss’s government will work with local communities to identify sites ripe for redevelopment and reduce planning restrictions, turbocharging commercial and residential development,” her campaign said.


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