Number of customers with adverse credit grows by more than 1.6 million

30 November 2022

The number of potential mortgage customers with adverse credit has grown by more than 1.6 million in the UK, according to the latest Pepper Money Specialist Lending Study.

The specialist mortgage lender, partnered with YouGov to conduct research amongst more than 6,000 adults, found that 15.1% of all adults have experienced some form of adverse credit in the last three years. Based on the latest ONS projection for the UK adult population of 52.4 million, this means the estimated number of people considered to have adverse credit to is now 7.91 million.

Pepper Money says this is a significant increase of over 1.6 million more people with adverse credit than the last wave of the research, which took place in Winter 2021. In that wave, the number of people with adverse credit was 6.29 million.

According to the Study, 10% of people with adverse credit in the last three years intend to buy a home to live in over the next 12 months, while 4% want to purchase a Buy to Let property with the intention of renting it out.

The research also found that 55% of adults with adverse credit who are planning to purchase a property in the next 12 months are concerned about having their application declined due to their credit history.

Paul Adams, Sales Director at Pepper Money, said: “Given the cost-of-living crisis, it’s unsurprising that the number of customers with adverse credit is growing, but credit problems do not necessarily need to stand in the way of getting a mortgage. Professional advisers are best placed to help customers understand the options and point them in the right direction for a lender that is best suited to help.

“Providing fast, robust and responsible decisions for customers with complex circumstances is not straight forward for lenders, but it is possible. At Pepper Money, we take pride in understanding your customers, to uncover the challenges or potential source of financial complexities. We share this information with our broker partners who are perfectly placed to better evaluate and identify the right mortgage solution to meet their customer’s need. Considering FCA Vulnerable Customer and Consumer Duty guidance this approach is vital in ensuring we work collaboratively with our broker partners to properly assess the needs of customers and enable them to achieve their goals.”