Half of adverse credit homebuyers would seek mortgage broker advice

Pepper Money’s 2024 Specialist Lending Study has revealed that half of potential homebuyers with adverse credit would seek advice from a mortgage broker, down from 58% in its previous survey.

The study suggests that the primary motivation is access to exclusive lenders for 67%. Securing the best market rates was the next most important factor, cited by 64% of respondents. When it comes to finding brokers, personal recommendations from family and friends are popular, with 47% relying on these, and 46% using online research.

The study also examined how homebuyers prefer to communicate with brokers, with 59% preferring face-to-face advice, followed closely by email - 58% - and telephone consultations - 50%.

Regarding broker fees, nearly 38% of respondents believe the decision to pay depends on the broker, while 27% favour brokers who don’t charge a fee. However, 13% express a preference for fee-charging brokers as they believe paid services might ensure more independent advice.

Rob Barnard (pictured), Pepper Money’s director of intermediary relationships, noted a growing confidence among consumers with adverse credit, estimating that 1.76 million people with credit issues plan to buy property within the next year. Barnard emphasised the importance of brokers in helping these customers.

“The growing number of people with adverse credit should mean there will be plenty of chances for brokers to help customers who have slipped up in their finances, he said.

Kate Fuller, business principal at Mortgage Advice Bureau, echoed this sentiment, emphasising that for many, “a mortgage is the single largest financial commitment they’ll ever make, and so professional advice is vital for all customers, particularly those who have adverse credit.” She pointed out that while only half of respondents initially consider brokers, about 85% of mortgages ultimately involve an intermediary.

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