The number of potential mortgage customers with adverse credit in the UK has increased by more than 1.6 million people in the past year, new research from Pepper Money has suggested.

According to Pepper Money’s latest Specialist Lending Study, 15% of all adults have experienced some form of adverse credit in the last three years.

The specialist mortgage lender partnered with YouGov to conduct research among more than 6,000 adults, and based on the latest Office for National Statistics (ONS) projection for the UK adult population of 52.4 million, this means the estimated number of people considered to have adverse credit to is now 7.9 million.

Pepper Money’s data indicates this is a significant increase of over 1.6 million more people with adverse credit than the last wave of the research, which took place in Winter 2021. At that time, the number of people with adverse credit was estimated to be around 6.3 million.

According to the latest study, Pepper Money also found that 10% of people with adverse credit in the last three years still intend to buy a home to live in over the next 12 months, while 4% want to purchase a buy-to-let (BTL) property with the intention of renting it out.

The research also found that 55% of adults with adverse credit who are planning to purchase a property in the next 12 months remain concerned about having their application declined due to their credit history.

“Given the cost of living crisis, it’s unsurprising that the number of customers with adverse credit is growing, but credit problems do not necessarily need to stand in the way of getting a mortgage,” said Pepper Money sales director, Paul Adams.

“Professional advisers are best placed to help customers understand the options and point them in the right direction for a lender that is best suited to help. Providing fast, robust and responsible decisions for customers with complex circumstances is not straightforward for lenders, but it is possible.”

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