Almost nine in 10 (89 per cent) mortgage brokers expect to advise more clients on Near Prime products over 2026, research from Atom Bank has revealed.
The research, which polled brokers at a webinar hosted by the bank, found this represents an increase on previous findings as just 74 per cent of brokers expected to advise on Near Prime when polled in the previous webinar held in December.
It was also reported that 81 per cent of brokers have seen an increase in clients with adverse credit or who have failed traditional credit scores over the past 12 months.
Atom bank head of mortgages, Richard Harrison, said: “After the increases in Near Prime demand reported by brokers last year, the belief is there will be further growth to come.
“That demand comes from both those making their first step on to the housing ladder, and existing homeowners coming off fixed-rate deals and facing the prospect of much higher rates than anticipated as a result of the situation in the Middle East.
“With cost of living challenges continuing to feed through into borrower prospects, pushing more aspiring buyers outside of Prime criteria, it’s crucial that the industry takes the time to better understand these borrowers and what they need in order to meet their homebuying dreams.”
The bank polled brokers on their opinions on the government’s plans to include financial education in the school curriculum, asking which areas they felt were more important for inclusion from a mortgage and lending perspective.
The real cost of borrowing and how debt can build up topped the survey, picked by 21 per cent of respondents, ahead of how to avoid problem debt, and credit scores and credit reports, both of which were identified by 14 per cent.
L&C Mortgages associate director, David Hollingworth, added: “We know that brokers are already seeing increasing numbers of customers who can fall outside of mainstream Prime criteria, whether because of payment issues in the past or a sparse credit file.
“With another surge in the cost of living expected it’s crucial for lenders to recognise this trend, and ensure Near Prime borrowers have access to funding, particularly first-time buyers.
“Saving for a deposit remains such a challenge that there’s real benefit in combining a more understanding approach to assessing creditworthiness with a broader range of higher LTV options.”
tom.dunstan@ft.com
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