Would-be homeowners are being ‘locked out of the mainstream mortgage market’ over minor credit blips – in come cases just a few hundred pounds.

The new research, from specialist lender Together, shows borrowers are facing problems when applying for a high street mortgage simply for being in their overdraft or missing a repayment.

A third (30%) of UK adults have had a credit blip on their record in the past, according to the statistics.

The research shows over half (51%) were aware of their credit history status before applying for a mortgage, while 14% were unsure of how likely they were to be approved.

This is highest among younger borrowers, with 45% of 18–34-year-olds, 35% of 35–54-year-olds and 16% of 55’s and older impacted when getting a high street mortgage.

Together says this highlights a ‘glaring awareness gap’ as ‘nowhere near enough’ potential mortgage borrowers are aware of their credit score and how it can significantly impact their applications.

The company says this is also becoming a much wider issue which is impacting more income brackets.

Together’s own internal data shows an increase of two thirds (66%) in middle-class borrowers with adverse credit taking out first charge mortgages since 2019 (pre-pandemic) when compared to 2022^.

And so far this year, Together says 14% of the first charge mortgages it has funded have had credit issues.

It adds it expects this to rise amid the ongoing cost of living crisis.

The research reveals that issues with credit are also having a knock-on impact to future property plans.

A quarter (24%) of respondents say they are re-thinking their future mortgage and property plans altogether, compounded by recent increases in interest rates and inflation.

In total, 64% of those who are not confident in being able to keep up with their mortgage repayments this year had a previous credit blip.

This is compared to 32% without any blips.

Together says is further indication of the increased awareness needed around mortgage application support.

Together’s personal finance distribution director Alan Davison says: “Would-be homeowners across the UK are being locked out of the mainstream mortgage market, simply because they have minor adverse credit of a few hundred pounds.

“Banks and other high street lenders often stick rigidly to strict criteria and automated processes when deciding whether to approve a mortgage application, and credit blips – even if they’re historical and have been caused by a debt that has been paid off – can easily lead to rejection.

“With more borrowers likely to accrue blips in the current climate, it’s important to remember there are still specialist lenders out there who will still consider blips or CCJs on applications, so long as a clear repayment plan has been set up.”

The survey of 2,000 UK adults was commissioned by Together and conducted by Opinium Research between 18 and 20 April.