Around 70% of near-prime borrowers have a household income of more than £50,000 per year, new research from Atom has shown.

The lender’s new Near Prime Index demonstrates that it is not only borrowers on low incomes who experience credit blips and may struggle to qualify for mainstream products from high street banks.

It found that only around 5% of near-prime borrowers earn less than £30,000 per year.

Around 24% of those taking out near-prime mortgages earn between £30,000 and £50,000, 36% earn between £50,000 and £75,000 and 19% earn between £75,000 and £100,000.

Its analysis shows that 15% of near-prime borrowers earn more than £100,000, with some earning over £200,000.

First-time buyers accounted for 52% of all near-prime borrowers, highlighting how these products can play an important role as a stepping stone into home ownership. 

Atom found that 31% of near-prime borrowers were home movers and 17% were remortgaging.

Atom Bank head of mortgages Richard Harrison says: “This inaugural near-prime index has allowed us to take the pulse of what’s happening in the mortgage market for borrowers with imperfect credit scores. 

“And what’s clear is that while this is a segment of the market which seems set to grow, brokers are frustrated with the approach of some lenders.

“Near-prime is not something which only applies to a certain subset of borrowers — a single payment issue can have a large impact on a borrower’s record, and they are often driven by a life event or incident rather than ill discipline. 

“As a result, it’s vital for lenders to be more open minded, to treat such cases proportionately and based on the individual factors at play.”