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'A new danger for anyone who shares a flat / house' blog discussion
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# 1
MSE Helen
Old 21-03-2012, 11:45 AM
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Default 'A new danger for anyone who shares a flat / house' blog discussion

This is the discussion to link on the back of Martin's blog. Please read the blog first, as this discussion follows it.





Please click 'post reply' to discuss below.
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# 2
JohalaReewi
Old 21-03-2012, 1:15 PM
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Doesn't bode well for students. I can see the attraction of having rent payments as part of your credit history, but creating a financial link to other renters in shared accomodation is not really on. Where will Experian stop?
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# 3
joshuarichards
Old 21-03-2012, 1:22 PM
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Hi there,

I'm just finishing my PhD in shared housing, and the notion of linking financial details between housemates would, I believe, add a level of complexity and risk that would go against how many of my participants viewed and practiced shared living, the depth of responsibility housemates feel toward one another, and also how finances are managed on a day-to-day basis.

There is a deep contrast between living in a shared house and living in a house where you share with a partner (and a joint bank account) or share a joint mortgage. Within the latter two there an is an overt responsibility between partners that bills and the mortgage need to be paid, and that both/all are responsible for this to happen to ensure the ongoing ownership of the property or supply of utilities. There is more likely (though not always) more open communcation over financies due to the nature of the relationship between people as they're 'in it together'.

Within shared accommodation, however, this sense of joint responsibility and knowledge over each other's finances is often not evident, and, with financial issues, it is often percieved that any financial problems are both none of anyone elses business, and not the responsibility of other housemates anyway. Financial responsibility is atomised, with individuals having responsibility only to themselves. If you can't pay your rent, it's your problem, not the rest of the house. Similarly, it is perceived that it is the landlord's job to ensure payment of rent, rather than housemates to police other residents. This becomes slightly more complicated within joint tenancies, but many people are in single tenancies or don't have a tenancy agreement at all.

Many people enter shared housing because of an amount of freedom it offers: short term tenancies, in cheap accommodation, where they can move on if they don't get along with people, but have the possibility to make friends in the process. It allows people to live in relatively expensive areas of cities but at a lower cost than living by yourself or owning your own home. But this level of transience brings with it risk to all involved, particularly in houses of 'randoms'.

When people come to look round a house and a room, the existing residents are already making an assessment about whether or not they believe they can live with you. They want to avoid weirdos, and find socially similar people to ensure a vaguely harmonious house if possible. To add a level of financial risk to this would become difficult. During this interview process, they can't always ask "are you in so much debt you can't afford to pay rent or bills on time"; at best they can ask, "What do you do for a living?" You have only superficial access to their financial history. If the changes to credit file reporting and financial associations is made, a financially savvy house will also be having to make a decision about how much that person living with them will then impact their future fiancial choices, as well as if they can live with them. The same is true for the person wanting to live in that house; how do they know that it is financially solvent and not going to impact their future financial choices?

On a very basic level, some residents of shared houses don't have any sense of responsibility or bond with their other housemates in the same way you would within a relationship with a partner, or someone you're in a contractual financial arrangement to pay off a mortgage. Some people will pay late, and some people will leave without paying their share of the bills. In a relationship, this is easier to address, you can rant and moan at your partner and (probably) be forgiven, but there's something a bit taboo about prying into someone elses finances we don't have any joint repsonsibility with - particularly when those finances appear to be in trouble (or at best, careless). We just don't do it.

Interestingly, in my research, most of the financial issues of house shares, such as bills, were not dealt with formally, or even verbally, but on the kitchen fridge. People would put lists up with who owed what to whom, with most bills being shared out to individuals where they took responsibility for one utility, such as water or gas, and then told everyone else how much they owed each month. Where bills weren't paid, the notes became more passive aggressive, and only when things became desperate, or where people were struggling to pay bills, did problems get talked about, and then often in a very apprehensive way. People just don't like talking about money, particularly when talking about money would cause an atmosphere within the house that would make living there uncomfortable.

Shared housing is seen as a very social thing, when in many ways it's an act of economic rationality - you're trying to find somewhere nice to live cheaply. But the financial element of shared living is often sidelined in favour of maintaining good relations within the house. There's a tension between friendships and economics that is difficult to negotatiate.

On a practical level, my concern would be that bringing in financial associations within shared accommodation would preclude people from access to this form of housing, which is often their only affordable route. If we bring about a situation where people are not allowed access to accommodation purely because existing housemates are worried about the financial consequences of being associated with them, it will also bring about a new form of social exclusion. We will also be moving the impact of credit ratings away from just institutional relationships, but relationships between peers, and your peers making an assessment about how your credit rating will impact them - and relationships between people are difficult enough already, when you're living in such close quarters!

Ultimately, I think that these changes assume a level of personal responsibility to others that is currently not always evident within shared accommodation.

These views are based on research carried out in 2010 within shared houses in South Manchester. I appreciate that all experiences of shared living are different, and I am just representing what I found within my own research. It's also only a snapshot of a much larger exploration of how people live within private shared accommodation, so please forgive any sweeping generalisation - I was aiming for brevity. However, I hope it's some food for thought.

Josh

Last edited by joshuarichards; 21-03-2012 at 2:17 PM.
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# 4
HAMISH_MCTAVISH
Old 21-03-2012, 2:48 PM
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I do have some concerns that the financial linking of flatmates on other matters is a step too far.

However other than that it is a very good idea.

It will help ensure rents are paid on time (and if you're even a day late then you are indeed using an unauthorised credit facility from your landlord).

It will ensure tenants realise that in the vast majority of cases they are jointly and severally liable for rent, so they'll take more care in choosing flatmates and reduce losses for landlords. Losses which are reflected in higher rents eventually as experienced landlords make provisions for such things.

It will allow tenants to build a better credit history and establish a tenants ability to pay regular monthly outgoings for housing that the banks will eventually start noticing. Rents are already higher than a mortgage payment in many/most places anyway, so current deposit requirements are absurd.

And tenants who look after their financial affairs will have access to a better choice of housing than tenants who don't. Ultimately, they'll be rewarded for paying rent on time.

All good things... So a worthwhile direction to be pursuing and it should be applauded overall.

Last edited by HAMISH_MCTAVISH; 21-03-2012 at 2:51 PM.
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# 5
rdr
Old 21-03-2012, 3:24 PM
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People under 35 are only allowed to claim housing benefit for shared houses. They are going to struggle or be confined to ghettos.
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# 6
Experian company representative
Old 21-03-2012, 9:03 PM
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Let me address the issue of financial links, which is clearly causing some concern.

One of the advantages of making a very early announcement on our Rental Exchange project was to enable us to listen to people's views - both positive and negative - and to take these into consideration at a time when we are still shaping the service. This particularly applies to some of the finer detail on how this data-sharing initiative will work in practice.

When we announced the initiative last week we didn't mention financial links. However, when pressed for more detail by the MSE team we did confirm that financial relationships created by joint tenancy agreements on the Rental Exchange were likely to link up people's credit reports.

It is now clear, particularly from monitoring comments in this forum, that this would be inappropriate in many cases, due to the nature of many joint tenancy arrangements.

As a result, it is not now our intention create financial links on credit reports from rental data.

Importantly - and as is always the case with the sharing and processing of personal data - consent/notification will be a prerequisite of the scheme. Agreements will make it very clear what data will be shared, with whom and how it will be used.

As I think I said in an earlier post on here, we are convinced that this service will bring very positive benefits for consumers, landlords and, of course, lenders. We are determined to get this right and will continue to listen to people's views and concerns as the service develops.

James Jones
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I am an official company representative of Experian. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"

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# 7
Experian company representative
Old 21-03-2012, 9:11 PM
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Sorry, having a few mobile connection issues :/
Official Company Representative
I am an official company representative of Experian. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"

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Last edited by Experian company representative; 21-03-2012 at 9:15 PM.
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# 8
MothballsWallet
Old 24-03-2012, 9:23 AM
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Quote:
Originally Posted by JohalaReewi View Post
Doesn't bode well for students. I can see the attraction of having rent payments as part of your credit history, but creating a financial link to other renters in shared accomodation is not really on. Where will Experian stop?
Where will they stop? When they can't make any more money out of this credit scoring thing.

Besides, don't all lenders use their own systems anyway without using Experian, Equifax, CallCredit, Aristotle or National Hunter for anything more than some basic detail verification?
Travelling to Russia? You can ask me about it (disclaimer: I'm not a travel agent).
Always ask yourself one question: What would MothballsWallet do?
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# 9
A Flock Of Sheep
Old 30-03-2012, 1:54 AM
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I am pig sick of both equifax and experian holding my data. And call credit. I think it is high time people could opt out of being conscripted to these companies who are getting too big for their boots.
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# 10
whitewing
Old 30-03-2012, 2:01 AM
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Quote:
Originally Posted by Experian company representative View Post
Let me address the issue of financial links, which is clearly causing some concern.

......................
.
When we announced the initiative last week we didn't mention financial links. However, when pressed for more detail by the MSE team we did confirm that financial relationships created by joint tenancy agreements on the Rental Exchange were likely to link up people's credit reports.


As a result, it is not now our intention create financial links on credit reports from rental data.

.............................

As I think I said in an earlier post on here, we are convinced that this service will bring very positive benefits for consumers, landlords and, of course, lenders. We are determined to get this right and will continue to listen to people's views and concerns as the service develops.

James Jones
I am very confused (may be the lateness of the hour) - are you doing it or not?
When you find people who not only tolerate your quirks but celebrate them with glad cries of "Me too!" be sure to cherish them. Because these weirdos are your true family.
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# 11
A Flock Of Sheep
Old 01-04-2012, 6:01 PM
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Quote:
Originally Posted by Experian company representative View Post
we are convinced that this service will bring very positive benefits for consumers, landlords and, of course, lenders. We are determined to get this right and will continue to listen to people's views and concerns as the service develops.

James Jones
So how much does your company hope to make out of this little scheme. I doubt you will be doing it for love?

Also I no longer give your company any permission to hold or process any data and information about me. How do I get you to delete it from your records?

Remind me to put Micky Mouse lives here on the electoral form this year to ensure I am not captured by yours or your cronies systems.

Thanks

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# 12
Experian company representative
Old 03-04-2012, 11:18 AM
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No, we are a data company so we make a living from providing data services that our customers find helpful. That includes consumers of course. What we're proposing is a new service to help tenants and landlords, which I'm pleased to say is being widely welcomed.

If you change your electoral roll entry to Micky Mouse will you then use this name when you next apply for a credit card? I would think very carefully about doing something like that.

James Jones
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I am an official company representative of Experian. MSE has given permission for me to post in response to queries about the company, so that I can help solve issues. You can see my name on the companies with permission to post list. I am not allowed to tout for business at all. If you believe I am please report it to forumteam@moneysavingexpert.com This does NOT imply any form of approval of my company or its products by MSE"

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# 13
A Flock Of Sheep
Old 04-04-2012, 10:30 AM
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Quote:
Originally Posted by Experian company representative View Post
No, we are a data company so we make a living from providing data services that our customers find helpful. That includes consumers of course. What we're proposing is a new service to help tenants and landlords, which I'm pleased to say is being widely welcomed.

If you change your electoral roll entry to Micky Mouse will you then use this name when you next apply for a credit card? I would think very carefully about doing something like that.

James Jones
I don't have or want a credit card. It is far better to save up for what you want than encourage borrowing. Our mortgage was paid of donkeys years ago. I don't want.a mobile phone contract or catalogue book and I am quite happy on prepayment key meter electric.

Our current account has no overdraft and is not reported to any of your systems but rest assured if it ever is we will be closing it.

When I last checked there were three settled accounts on your records and like I say I no longer give your company permission to hold or process any information about me so how do I get you to delete these records and remove me from your systems?

Last edited by A Flock Of Sheep; 04-04-2012 at 10:33 AM.
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# 14
Experian company representative
Old 05-04-2012, 10:20 AM
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It doesn't quite work like that. The data sharing agreement was part of your contract with the lenders in question. You cannot restrospectively rescind this.

James Jones
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# 15
A Flock Of Sheep
Old 06-04-2012, 12:49 PM
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Well in less than 2 years the entries will be dropping off anyway and between now and then as I don't require credit or the services of your company inflicted on me I will fill your database with rubbish by changing the names on our electoral form.
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