An estimated 1.26 million people with adverse credit are looking to buy a property in the next 12 months, according to Pepper Money.
The research, which was carried out by YouGov, revealed that 15% of respondents (or 7.86 million people) have experienced credit issues – including missed payments, County Court Judgements (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 year, meaning that 1.26 million people may need the support from a broker.
These statistics highlight the opportunity for brokers to help borrowers to buy a home or to help refinance.
“With growing levels of unsecured debt and increasing numbers of missed payments, CCJs and defaults, more people are finding that they have a record of adverse credit on their credit file,” says Paul Adams, sales director at Pepper Money.
“But they also still have ambitions to take the next steps in their lives - to purchase a new home and apply for a mortgage, and many of those are the people who require an adverse credit mortgage.”
The good news, according to Adams, 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 adds: “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.”