The research found that 6.81m people, or an estimated 13 per cent of the UK have experienced credit problems, including missed payments, CCJs, defaults and secured and unsecured arrears in the last three years.
Of these, 16 per cent of people are thinking about buying a property in the next 12 months, which means that there are 1.09m potential home buyers with adverse credit.
This number has fallen by nearly 250,000 since the last time Pepper Money conducted its Adverse Credit Study in February, when it was found that 1.34m people with adverse credit were thinking about buying a home in the next 12 months.
The research also found that 69 per cent of this group are concerned about having a mortgage application declined.
Paul Adams, sales director at Pepper Money, said: “We last carried out this study earlier in the year, ahead of the first national lockdown to combat Covid-19, so it’s really encouraging that the number of people with adverse credit has actually fallen since then.”
He suggested many people may have spent less money during lockdown and so more people than before took the opportunity to try to repay debts.
“However, of those who do have adverse credit and intend to buy a property in the next 12 months, nearly seven in 10 are concerned that their mortgage application will be declined. So it’s important that brokers engage with the specialist market and communicate the opportunities with their customers.”
The Pepper Money research is available here.
ONS figures out today show UK redundancies gathering momentum with a record high of 314,000 losing their jobs in the three months to September.
Ruth Gregory, a UK economist at Capital Economics, predicted that the jobless rate would peak at nine per cent after the end of the furlough scheme next spring.
Watch out for the Pepper Money video debates focused on this research, prospects in the adverse credit market and broker strategy coming soon.