Atom bank’s Near Prime Index report reveals that for the second half of 2025 cost-of- living pressures had become a more pronounced driver for Near Prime applications according to brokers. Cost of living was cited as the primary reason by 71% of brokers surveyed, up from 62% in the last Index
First-time buyers also accounted for an increasing proportion of brokers’ Near Prime clients, while Atom’s customer data suggests the majority of Near Prime customers are first-time buyers
Calls for more high LTV options was pinpointed by over a third of brokers as the biggest barrier to submitting applications for Near Prime first-time buyers
Defaults remained the biggest contributor to Near Prime status, appearing in 73% of Atom bank cases
Other key factors included increased reliance on consumer credit (56%) and the impact of life events (48%) according to brokers
Demand for Near Prime is expected to continue to grow, with two-thirds (65%) of brokers forecasting a slight increase, and 12% predicting a significant jump.
According to the index, lender capacity for adverse cases is improving, with more than three-quarters (77%) of brokers reporting an increase in appetite for such deals from mainstream lenders over the last six months, and one in 10 (12%) noting a significant increase
The price premium faced by Near Prime borrowers, compared with Prime borrowers, has decreased over the last 12 months, brokers say, suggesting competition is pushing prices downwards.
Commenting on the latest data, Atom bank head of mortgages Richard Harrison said: “The housing ladder only functions if first-time buyers can access it. However, as our latest Near Prime Index makes clear, that accessibility is increasingly reliant on lenders being more flexible over the credit profile of the borrower, whether that’s due to payment hiccups in the past or simply the fact that the borrower has little credit history to speak of.”
He added: “A broader range of high LTV Near Prime products is essential, with the LTVs on offer often the primary driver for lender selection. While brokers have reported seeing greater levels of competition among mainstream lenders, this progress may have stalled due to the current market uncertainty. We must hope that progress not only resumes when the conflict concludes, but that we see it result in greater choice for borrowers at all deposit levels.”
