Sep 22, 2022
When applying to rent a property in Ireland, letting agents and landlords will ask for background information about a tenant’s financial situation. This will usually involve tenants sharing copies of sensitive financial documentation to establish proof of affordability for the monthly rent obligations.
It’s common for agents to request copies of bank statements for at least 1 month, often up to 3 months, as well as copies of payslips, employment contracts and even a full year’s financial statements for self-employed renters. Most people are uncomfortable sharing this information, especially when they aren’t even sure they will secure a lease on the property.
To help solve this problem, RentDodo has introduced a new hassle free way for tenants to show that they can afford to pay the rent without divulging their personal financial history. RentDodo has utilised the EU’s open banking rules to bring a secure technological solution to sharing sensitive financial information with letting agents and landlords. By verifying their monthly income using open banking with RentDodo, tenants will never have to share copies of bank statements or payslips again.
A secure way to show letting agents proof of your rent affordability
Use open banking technology to verify your income independently
Never send physical or PDF copies of bank statements and payslips again
Peace of mind nobody can see your personal financial information
When tenants connect their bank account to RentDodo, they do so using its open banking technology platform. They will be authorising RentDodo to scan only their recent inbound payment transactions to their bank account over the past 6 months. RentDodo will not have access to other information such as account balances, outbound payments made, account numbers or account holder information.
By reviewing the user’s transactions RentDodo can verify their average monthly income which they must enter at the start of the process. Whether a tenant is paid weekly, monthly or at irregular intervals such as freelancers and self-employed tenants, RentDodo can verify a tenant’s income using monthly averages over a 6 month period.
Once the tenant’s income has been verified, RentDodo’s access to the user’s bank account and all connected data is deleted from RentDodo’s servers. RentDodo never retains a user’s bank account information or transaction history after income verification has been completed.
Letting agents and landlords who have requested to see a TenantCert will see the tenant’s affordability score, they cannot see their bank transactions, income or salary information.
Using the Irish Government Housing Agency’s method of calculating rent affordability, RentDodo divides the monthly rent of a property by the tenant’s verified monthly income to determine their affordability score. Only when a tenant has shared their TenantCert with a letting agent, will it be possible to view their affordability score with respect to the property they have applied to rent.
Once the tenant’s affordability score has been calculated, which takes less than a minute, RentDodo will no longer have access to the tenant’s bank account. Furthermore, none of the tenant's banking information is stored by RentDodo. If a tenant’s financial situation changes they must reconnect their bank account to RentDodo to update their affordability score.
According to the Irish Government’s website, these are the rent affordability levels (which can be found here):
|Rent ➗ disposable income||Housing Agency’s description|
25% or less 🟢
Based on the information provided you are spending less than one quarter of your monthly disposable income paying your basic housing costs. This level of spending is generally deemed to be affordable.
25% to 34% 🟡
Based on the information provided you are spending between one quarter to just over a third of your monthly disposable income paying your basic housing costs. This level of spending is generally deemed to be affordable; however, some lower income households may find it difficult to sustain this level of payment.
35% to 39% 🟠
Based on the information provided you are spending over 35% of your monthly disposable income on your basic housing costs. This level of spending is above the threshold deemed affordable for many households and increases the risk of facing housing cost affordability challenges.
40% or more 🔴
Based on the information provided you are spending over 40% of your monthly disposable income on your basic housing costs. This level of spending is considerably above the threshold deemed affordable for many households. Individuals or households in this category are at the highest risk of facing housing cost affordability challenges.
Example: a tenant’s net monthly income is €3,500 and the property they are interested in renting is €1,000 per month, their rent divided by income is 28.5% which means their affordability score is in the 25% to 34% 🟡 bracket.
With joint tenants, they can create a joint tenant relationship on RentDodo. Then, once they have both completed the income verification part of their TenantCerts, the affordability score will factor in both of the tenant’s monthly incomes in order to calculate the affordability score. Not only is each tenant’s financial information hidden from the letting agent, neither tenant will be able to see the other tenant’s financial information either. This offers tenant’s a secure and easy way to apply for rental properties jointly.
Open banking was introduced to offer EU bank customers greater control over their data, giving them the option to securely share their current account information using Third Party Providers, known as TPPs. These include banks, online retailers and financial technology (Fintech) providers.
Open banking is happening because of the introduction of new EU regulations, which set out to make the banking industry more competitive and to encourage the development of innovative new products and services which make managing a person’s finances more straightforward and enable them to save both time and money.
Open banking is backed by strong EU financial legislation, The Payment Services Regulations 2017, designed to provide consumers with safety and security. When a user gives access to RentDodo’s open banking technology provider, their bank will check that it is authorised and regulated by the Financial Conduct Authority (FCA), meaning that it is forced to comply with strict security mechanisms and data protection laws, just like a tenant’s own bank.
The process is simple and can be all done online in under a minute from a user’s mobile device or computer. Firstly, they provide consent to access the user’s data. To do this, RentDodo will direct a user to their own bank’s secure website (called the Account Access site) where the user verifies themselves and provides their authority to the bank.
Remember that RentDodo cannot access a user’s information without the user first providing their consent, and they can always choose to stop sharing data at any time.
When a tenant shares sensitive financial information with letting agents by email or on paper, they can never be sure that it’s handled correctly. Furthermore, tenants may have irregular income patterns or working arrangements, monthly financial obligations, and other sensitive financial information that they do not want others to see. RentDodo’s income verification and affordability scoring provides tenants with a secure way to communicate with letting agents that they can afford to meet the rent without having to divulge sensitive personal information.
Besides, who keeps physical or PDF copies of bank statements and payslips anymore?