Adverse credit impacted 8.3m in three years, study finds – Mortgage Strategy

As many as 8.3 million individuals in the UK have experienced adverse credit in the last three years, the latest Pepper Money Specialist Lending Study has unveiled.

The figure is the highest level recorded since the study was launched in 2019, while of  those who say they’ve missed a credit payment, nearly half (46%) say they have gone on to miss more than one payment.

However, 1.76 million would-be borrowers with adverse credit have plans to buy a property in the next 12 months.

The fifth iteration of the specialist lending report was unveiled at an event hosted by the lender in London last night, 26 September, and included panel discussion and a key note speech from economist Trevor Williams.

YouGov surveyed over 4,000 on behalf of Pepper Money, covering topics including adverse credit, unsecured debt, employment types and income sources, Buy to Let, prospects for home ownership, second charge mortgages and attitudes towards sustainability.

The report revealed that nearly seven in 10 (69%) of those who don’t currently own a home would like to, however 36% believe this will never be possible.

Meanwhile 4.2 million (8%) people have an existing mortgage deal coming to an end in the next 12 months.

Of those who are self employed, 72% believe that this will make it harder for them to get a mortgage, the study found.

In the buy-to-let sector, more than half of landlords with a mortgage (53%) have had to remortgage in the last 12 months and 56% of those have seen their mortgage payments increase by more than 20%. Only 50% of this group said they have increased
rent by 20% or more.

Pepper Money sales director Paul Adams says: “The research has shown that, despite the significant growth in the number of people with adverse credit, there continue to be many misconceptions amongst mortgage customers. The fact nearly a fifth of people think they would need to wait longer than five years to apply for a mortgage following a CCJ is concerning, given that they could access the mortgage market within months of a CCJ.

“This presents a great opportunity for brokers and the wider industry to raise customers awareness about the options available to meet their individual financial circumstances.”