It’s a common problem for tenants looking to get on the ladder (Image: Iryna Melnyk via Getty Images)
Thousands of renters are being refused mortgages they could comfortably afford because lenders place more weight on their payslips than years of proven rent payments, a property expert has claimed. Patricia Ogunfeibo, founder of London-based tenant2owner, said the system was trapping would-be first-time buyers who had demonstrated for years that they can meet monthly housing costs, only to be told they do not satisfy traditional affordability tests.
She argued that while mortgage lenders scrutinised applicants’ income, they often failed to properly recognise the strongest evidence of all – a long history of paying rent on time every month. It means some tenants are paying more in rent than the mortgage repayments they are applying for, yet still find themselves unable to buy a home.
Ogunfeibo believes this is one of the biggest flaws in the UK’s mortgage market and is urging lenders and regulators to rethink how affordability is assessed.
She said: “In England this month, a tenant paid £1,600 to her landlord. She paid her rent in full, for the 72nd consecutive month of her tenancy. She has paid through a pandemic, through the cost-of-living squeeze, and through rent rises she had no power to refuse. This afternoon, a lender may tell her she cannot afford a mortgage of £1,475 a month.
Patricia Ogunfeibo (Image: Newspage)
“Not because of her record. Because of her payslip.”
She said some lenders had begun recognising rental payment histories through products such as Skipton Building Society’s Track Record mortgage, but argued the industry had only gone halfway.
She added: “Pay, for years, a rent higher than the mortgage you are asking for and your reward is permission to be assessed as though those payments never happened. That is a half-finished revolution because the rent record should not merely excuse the deposit. It should carry the affordability decision itself.”
Ogunfeibo rejected suggestions that using rent history would represent a return to the risky lending practices seen before the financial crisis. Instead, she said today’s technology meant rental payments could be independently verified through open banking and rent reporting platforms, providing robust evidence of a borrower’s financial behaviour.
She added: “This is the hardest data in any lending file: not what someone says they earn, but what they have demonstrably paid, for years.”
Her intervention comes as the Financial Conduct Authority reviews mortgage affordability rules, with first-time buyer access among the issues under consideration. Ogunfeibo believes the regulator should allow verified rental payment records to become primary evidence of affordability, while income checks remain as a safeguard rather than the deciding factor.
She continued: “What I am arguing is that verification should stop doubling as the verdict. A lender could build tomorrow, within today’s rules, a product in which a sustained, verified rent record covering the stressed mortgage payment drives the affordability decision, with income checked as the backstop rather than imposed as the gate.”
She also argued that the benefits would extend beyond helping renters onto the property ladder.
She added: “Helping reliable tenants buy a home of their own doesn’t just help them, it also helps the private rented sector by freeing up much-needed supply in a struggling market in line with the government’s priority for housing.
“The evidence exists. The data rails exist. The regulatory moment is open.”
Ogunfeibo added that after years of proving they can meet their housing costs, many renters feel frustrated that the same payment record still counts for so little when they try to buy their first home.
She said: “What every landlord already knows is overdue for saying out loud: the best predictor of whether someone will pay their mortgage is whether they have already proved, month after month, that they can pay for a roof over their heads.”
