First-time buyers’ homeownership hopes could be helped by Netflix subscription in new partnership

Aspiring homeowners could have their subscriptions to services like Netflix or Spotify contribute to their ability to get a mortgage.

Following a new partnership between Leeds Building Society and credit information company Experian, a service will allow extra evidence of a borrower’s good financial track record to be factored into lending decisions.

It means the previous 12 months of regular debit payments, such as council tax and subscriptions to digital entertainment services like Netflix or Spotify, can now positively affect credit scores and be factored into mortgage applications to the Society.

Open banking technology, which allows people’s information to be shared securely, sits behind the initiative as it is used to link the borrower's current account payments to their credit score.

This is then connected to Leeds’ lending systems, but data cannot be shared via open banking without the consumer’s explicit consent.

Leeds Building Society said that during testing, 7.5% of Society applicants would have gained an improvement in their credit score by using the new set-up, called Experian Boost.

And Leeds is not the only lender to have unveiled an innovative way to potentially accelerate some first-time buyers’ dreams of homeownership.

On Tuesday, Skipton Building Society announced a new zero-deposit mortgage deal aimed at renters who aspire to be first-time buyers.

They said tenants aged 21 and over may be able to take out mortgages at between 95% to 100% of the value of the property they want to buy.

In return, they will need to demonstrate a strong track record of paying their rent, with evidence of a minimum of 12 months of rental history, as well as passing affordability and credit checks.

Leeds Building Society has more than 800,000 customers and last year it helped 18,000 people onto the housing ladder.

It lends up to 95% of the value of a home both for outright purchase and shared ownership mortgages, applications for which will also be eligible for boosted credit scores.

“This will particularly help younger borrowers, first-time buyers and anyone on lower incomes who face the toughest challenge to prove their ability to repay," said Richard Fearon, chief executive at Leeds Building Society.

“Often through no fault of their own, these groups can struggle to build a good credit score because they need to spend most of their earnings on rent and other regular payments."

Aside from a credit score, there are other factors considered by lenders when assessing an individual’s mortgage application, such as their income, employment status, and overall financial stability.

Not all credit scores will increase with Boost, but it will never cause a credit score to go down, those behind the initiative said.

Leeds Building Society said customers can opt in and out of the Boost service at any time.

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