Over a million aspiring homeowners still have 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 latest research found that 13% of respondents, or 6.81m people, have experienced credit problems, including missed payments, CCJs, defaults, unsecured arrears and secured arrears, in the last three years.

Of these, 16% 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.

The research also found that 69% 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. This could be connected to the fact that many people spent less money during lockdown and so more people than before took the opportunity to try to repay their 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. Specialist lenders, like Pepper Money, are able to provide competitive options for customers with these circumstances, even if they have recent missed payments as a result of Covid, so it’s important that brokers engage with the specialist market and communicate the opportunities with their customers. A good place to start is by reading the Pepper Money Adverse Credit Study, and I’d recommend all brokers to download a copy from our website.”