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More than one million adverse credit borrowers could need advice over next year – Pepper

  • 17/10/2019
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More than one million adverse credit borrowers could need advice over next year – Pepper
An estimated 1.26 million people with adverse credit will be looking to buy a property or remortgage within the next 12 months.


According to Pepper Money’s Adverse Credit Study of 4,163 people in the UK, 15 per cent had experienced credit problems, including missed payments, CCJs, defaults, unsecured arrears and secured arrears, in the last three years.

Of those, 16 per cent said they were planning to purchase a property in the next year, suggesting around 1.26 million people in the UK, a sizeable and potentially lucrative market for mortgage brokers to tap into.

Some 69 per cent of respondents with adverse credit who were looking to get on the property market or remortgage said they were worried about an application being declined however, 95 per cent of those with adverse credit who applied for a mortgage had it approved on the first attempt. 

Furthermore, although adverse credit history affected the application process of 50 per cent of respondents, just five per cent had been rejected the first time they applied. 


Seeking advice

Just 40 per cent of those with adverse credit who were planning to get a mortgage or remortgage in the next 12 months said they would go to a broker for advice.

A further 30 per cent said they would would seek help from family and 28 per cent from friends.

The multiple choice question allowed respondents to select all answers which applied, including going to a bank, to which 44 per cent said they would do, while 36 per cent said they would look for advice online.

When seeking broker support, 49 per cent would research online to find the right adviser while 44 per cent would refer to an existing relationship with a broker.

Some 36 per cent would rely on recommendations from family and friends.

Paul Adams, sales director at Pepper Money, said: “This research shows that the potential adverse credit mortgage market is larger than probably anybody had assumed.

“The good news is that there are plenty of competitive options from lenders, where decisions are made by underwriters who will take a pragmatic view of the customer’s previous circumstances and future ability to maintain payments on a mortgage.”

He added: “The not so good news is that many of these potential borrowers are writing off their own chance of getting a mortgage before they even speak to a broker.

“Our research proves that we all need to work harder to spread the message that previous credit problems do not have to mean future mortgage problems and professional advice can help people to find the right mortgage for their requirements.”


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