Having Netflix and Spotify could help young people get a mortgage
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Aspiring homeowners, listen up! Your Netflix and Spotify subscriptions may help you get a mortgage.
We were never taught about the ins and outs of credit scores and a good financial track record in school - it certainly would've come in more handy than Pythagorus' theorem.
Luckily, Leeds Building Society has connected to Experian's free Experian Boost service and revealed a plan for if you're hoping to get on the property ladder which allows you to use your subscriptions - such as Netflix or Spotify - as a way to actually help buy your first home.
It seems paradoxical how spending money on services which aren't strictly necessary - particularly amid a cost of living crisis - could help when it comes to buying your own home.
However, regularly paying a subscription every month could be used as a way to partially prove an aspiring homeowner's financial track record is reliable and that they have the ability to pay back a mortgage at a steady rate.
Leeds Building Society has announced it will now consider factors such as Netflix and Spotify subscriptions - as well as more boring payments like council tax - during mortgage meetings, looking at whether the applicant has 12 months of regular debit payments.
Chief executive at Leeds Building Society, Richard Fearon, explains the plan will 'particularly help younger borrowers, first-time buyers and anyone on lower incomes who face the toughest challenge to prove their ability to repay,' as well as people who have been trapped in a cycle of renting.
He tells the Independent: "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."
Although, just because you hand over money to Spotify, Netflix, Amazon and whatever else every month, it doesn't mean the deal is sealed.
As well as looking at a mortgage applicant's previous 12 months of regular debit payments, the applicant's overall financial stability will also be assessed by the building society, looking at everything from their employment status to income.
Leeds Building Society's plan follows soon after Skipton Building Society recently revealed it's launched a mortgage that does not require a deposit.
Only open to first-time buyers over the age of 21, the 'Track Record Mortgage' has a maximum mortgage term of 35 years and a five-year fixed rate at 5.49 percent.
Skipton's Charlotte Harrison said: "We recognise there’s a clear gap in the market for people who have a strong history of making rental payments over a period of time so can evidence affordability of a mortgage - but there is currently no solution for them to buy a property due to lack of savings or access to family wealth.
"It is time for a re-think on these massive barriers to home ownership, and we’re proud to take the lead on bringing to the market, solutions for such a massive social problem."