Pepper Money has launched its 2023 Specialist Lending Study, which found that an astonishing 15.16m people in the UK have some history of adverse credit.
Adverse, or ‘bad credit’ can include anything from missed credit payments, defaults, CCJs, unsecured arrears, secured arrears or entering a debt management plan.
The latest edition of the Pepper Money Specialist Lending study is based on research conducted by YouGov in September of 2023 and was collected amongst a nationally representative sample of more than 6,000 UK adults.
The study also found that nearly half of people (49%) who have missed one credit payment say they have then gone on to miss further credit payments.
According to the Pepper Money study, 13% of those who have experienced adverse credit in the last three years say that they intend to purchase a property in the next 12 months, which equates to just over 900,000 potential mortgage customers with adverse credit in the coming year.
However, 84% of all respondents say the current economic environment will make it harder for them to get a mortgage.
Paul Adams, sales director at Pepper Money, said: “The 2023 Pepper Money Specialist Lending Study has been our most comprehensive research to date and has provided more insights than ever before.
“It’s clear that the cost-of-living crisis is taking its toll and is impacting those people with adverse credit the hardest. It paints a picture of challenge, but it also paints a picture of opportunity. Because it’s circumstances like these that are the reasons why lenders like Pepper Money exist. We work hard to develop the insights into what customers need, and we devise our proposition around those insights – not just our products and criteria, but also our service and the way we communicate throughout the process.
“We aren’t alone in our sector, and there remains good opportunities for people to continue to work towards their objectives when it comes to their home and mortgage. The secret to unlocking these opportunities is professional advice, and there has been no clearer call to action about the important role that mortgage brokers have in reaching out to new and existing customers to ensure they are able to make a positive difference to as many lives as possible.”
Business Chamber spoke to bad credit mortgages specialist Tony Higham of Mortgage Success and Adverse.Online, who said, “Looking back at the 2023 UK mortgage market was some sobering reading indeed as the continued rise in the cost of living has had an hugely adverse affect on household finances.
The best advice I can give to people struggling now is to address any issues without delay and to not make matters worse by avoiding speaking with their creditors.“
The outlook may look somewhat bleak for a lot of people right now and as the Pepper Money study shows, the scale of bad credit affecting the UK is significant but as Paul Adams from Pepper says, “it’s circumstances like these that are the reasons why lenders like Pepper Money exist”
Higham added: “Paul Adams from Pepper sums it up nicely in that whilst the current conditions may look bleak, the reason why Pepper and other lenders like them exist, is that they offer specialist bad credit mortgage products and unlike the high street lenders, they are sensitive to life’s challenges and the reason someones bad credit happened.”
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