Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.

Demand for Near Prime Mortgages Increases, Broker Poll Finds

A recent broker poll by Atom Bank has found that demand for near prime mortgage products is rising. According to the survey, 81% of brokers have seen an increase in clients with adverse credit or who have failed traditional credit scores over the past 12 months.

This figure is slightly lower than a similar survey conducted in December, when 93% of brokers reported an increase. The findings highlight ongoing challenges for borrowers who do not meet prime lending criteria, a trend relevant to letting agents and inventory clerks monitoring shifts in the UK property market.

Richard Harrison, head of mortgages at Atom Bank, stated that demand for near prime mortgages is coming from both first-time buyers and existing homeowners who are coming off fixed rate deals. He noted that these homeowners are facing higher rates than anticipated due to the situation in the Middle East. Harrison also commented on the importance of the industry meeting the needs of near prime borrowers, especially as cost-of-living challenges continue to affect buyer prospects.

David Hollingworth, associate director at broker London & Country, said it is important for lenders to recognise the growing trend of near prime lending. He pointed out that saving for a deposit remains a challenge, and there is value in lenders taking a more understanding approach to assessing creditworthiness and offering a broader range of higher loan-to-value (LTV) options.

Atom Bank has been active in supporting near prime borrowers. David Castling, its head of intermediary lending, recently discussed broker frustration over the way all near prime mortgages are grouped together. He suggested that a more nuanced approach is needed, as reasons for near prime status vary, including lack of credit history or past adverse events.

For letting agents and inventory clerks, these developments may signal changes in the types of tenants and buyers entering the market, as more individuals with non-prime credit profiles seek housing solutions.