More than a million aspiring buyers with a tainted credit history are looking to purchase a home in the next year, according to research commissioned by Pepper Money.
The YouGov survey found that 13 per cent of respondents – equivalent to an estimated 6.81m people – reported having credit issues in the past, such as missed payments, county court judgments, defaults or arrears within the last three years.
However, the number of people with adverse credit has actually fallen slightly from 15 per cent when the research was last carried out in February.
Of those with adverse credit, 16 per cent want to buy a home within the next year – equivalent to 1.09m people.
The research found that 37 per cent of those with a tainted credit record have seen a drop in their income as a result of Covid, compared to 25 per cent of the wider population.
Meanwhile, 35 per cent of those with adverse credit have increased their debt as a result of Covid, compared to 25 per cent of the population at large.
Of those with a chequered credit history who are looking to buy in the next year, 66 per cent said they would seek advice from a broker.
Among the same group, 69 per cent said they were concerned about their application being declined.
Pepper Money sales director Paul Adams says: “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.”
