Canopy, the digital rental platform, was awarded a grant from UK Research & Innovation (UKRI) in 2021 to improve the referencing prospects for those locked out of the housing market due to the strain the pandemic caused on their income.
With this grant, Canopy has now built technology to potentially allow those financially impacted back into the market.
Affordability checks are a vital part of securing a rental property. Traditionally, these checks are carried out using three months of payslips to confirm the prospective tenant has the sustainable income required to pay the agreed rent.
However, the pandemic greatly impacted furloughed and self-employed workers, reducing or halting their income.
This led to an unprecedented number of renters being unable to move on from their existing properties, even if they were financially able, while others were unable to get onto the rental ladder to begin with.
In response to this, Canopy has built technology that can identify those who have seen their incomes impacted by the pandemic.
Whether that be those who took grants, were placed on furlough or were gig-economy workers and therefore couldn’t work often.
An algorithm is then able to reflect an underlying affordability score, which takes into account the pandemic, but also the likelihood that their income levels would recover post-pandemic.
This feature will sit alongside the traditional affordability score on the referencing report Canopy generates, meaning prospective tenants can share a comprehensive guide of their affordability with estate agents or landlords, who in turn have more information to hand when deciding whether to let to a tenant
Chris Hutchinson, CEO of Canopy, said: “The pandemic has been a tough time for everyone, and renters are no different. Many have found themselves unable to secure a property due to the complications the pandemic and multiple lockdowns placed on their finances. To a standard affordability check, many were deemed unable to provide the funds necessary to rent their chosen property.
“Landlords also face the challenge of being unsure whether they can trust a renters most recent income payments as a predictor of their ability to pay their rent, and as such, we felt it was essential to add this new feature to our offering. An individual’s finances aren’t always black and white, so with this new technology we can establish what any grey areas mean and allow both renters and landlords to have a fuller picture”
