Speaking at the Simplybiz conference in the West Midlands yesterday, Barnard said this time, the market is different with no self-certification, no 100%-plus lending and tighter lending criteria on buy to let.
“It’s totally different to before because it has to be affordable, he said.
Pepper surveyed brokers on cases which they had found difficult to place.
The findings revealed 20% of those difficult-to-place cases were adverse credit, 13% self-employed, 13% older clients, 6% expat cases and 4% of the cases had complex incomes. Just 3% of hard-to-place cases were debt consolidation.
However, 30% of all advisers said they had seen an increase in clients with adverse credit.
This is unsurprising said Barnard, given the four consecutive years of rising County Court Judgments (CCJs) to date, with £1.7bn registered in 2016. The average CCJ value has fallen to £1,711, with defaults coming from smaller bills like payday loans, mobile phones and other smaller types of credit.
“People will need guidance and help to deal with this issue,” said Barnard.
A subsequent specialist lending panel debate agreed the term sub-prime is still out of favour, but Barnard said 85% of brokers expect to place more adverse credit in future than the 56% who currently place this type of business.