Around 42% of people commonly underserved by lenders do not even apply for mortgages despite describing their position as financially secure, according to Bluestone Mortgages.

The report finds that of those often underserved in the mortgage market – the self-employed, those who have a poor credit history or none at all – some 26% have not tried to buy property ladder for fear of being rejected

It says 23% did not attempt to buy a home due to worries about the pressure the application process would cause, while another 23% were concerned about how the impact their mortgage application might have on their credit score.

The survey says this comes at a time when 78% “of those who have traditionally struggled to secure a mortgage would describe their financial situation as secure”, it adds that only 22% of those questioned described their financial position as “not secure”.

The report adds that “the challenges these respondents face also extend beyond the mortgage industry”.

It found that 48% of respondents say they have fewer financial choices than others, due to them not fitting a ‘vanilla’, or near-perfect, criteria they believe are held by mainstream lenders.

Another 46% feel that financial organisations do not understand their situation, this jumps to 85% among those who have missed a payment that affected their credit score.

Bluestone Mortgages chief executive Steve Seal says: “It is concerning that so many people in the UK have made the conscious decision not to apply for a mortgage due to the fear of being rejected, despite being in a financially secure position.

“This is a result of people with different financial circumstances being negatively labelled and deemed ‘unlendable’ by the mainstream mortgage market.

“Looking ahead we will see a growing cohort of people who do not fit traditional lending criteria due to the financial impact of Covid-19 and the rising cost of living, and it is vital that these individuals do not give up on their homeownership dream when mainstream lenders’ computers say no.

“It is important to remember that there is help at hand and this is where the specialist lending market has a crucial part to play.

“With their individual approach to underwriting, these lenders can assess customers on a case by case basis and provide them with an opportunity to get onto the housing ladder.

“However, many people are often unaware of the options available to them, especially if they have been turned away. It is, therefore, the responsibility of high street lenders to signpost these customers to the available options, to ensure that they can make their homeownership dream a reality.”

Bluestone Mortgages commissioned data group Opinium to carry out this survey between 2 and 9 December 2021 among 1,003 UK adults who were either self-employed, have a blip in their credit score or have no credit score.