Despite cost-of-living pressures and record-high mortgage rates, demand for homeownership remains steady with over of third (35%) of those aged 18 to 34 aiming to secure a mortgage, the latest research from Together reveals.

However, Together’s survey found that a fifth (23%) of potential mortgage borrowers have had their application rejected in the past 12 months, while the same number were rejected in the past five years.

Of those who were rejected, 26% of those were planning to buy homes via Help to Buy or Shared Ownership and 29% were rejected for having a County Court Judgement (CCJ) on their record.

Together says almost a fifth (17%) of all UK adults are categorised as having adverse credit, regardless of whether they’ve had their mortgage approved, rejected, or not even having applied.

This includes those who may have missed payments on a loan or credit card (7%), missed a payment on an unsecured loan (6%), entered a debt management plan (6%), been issued with a CCJ (4%) or if they have defaulted on their mortgage or other loans (4%).

With the cost-of-living crisis impacting people’s day-to-day finances and ability to keep up with mortgage repayments, Together warns that the likelihood of factors affecting applicants’ credit scores is expected to increase dramatically.

The survey also highlights the significant emotional toll of being rejected.

Among those who had been turned down, 32% say the result left them feeling worried for their future, 26% said it made them depressed and 23% said they felt like a failure.

Economist Dr John Glen warned that hundreds of thousands of mortgage applications between now and 2030 could fail due to borrowers not fitting the strict criteria of mainstream banks.

Commenting on the latest findings, Together personal finance chief executive Pete Ball says: “It is imperative that the mortgage market works towards becoming more inclusive, especially as today’s cost-of-living crisis will likely have a long-term impact on our financial wellbeing.”

“As the cost-of-living crisis shows no signs of letting up, we anticipate the proportion of those with adverse credit is set to rise in the immediate term.”

“We will see more potential borrowers being overlooked by some mainstream lenders because of factors such as missing a bill payment on a credit card or another type of unsecured loan.”

“These credit blips may date back years – or be something the applicant is completely unaware exist – but can have repercussions on their ability to successfully apply for a mortgage.”