Nearly half of Scottish non-homeowners believe they will never buy, but Pepper Money's Rob Barnard says the solutions exist
Scotland's homeownership problem is not what most people think it is. The barrier is not aspiration, it is the belief that the door is already closed to them.
That is the view of Rob Barnard (pictured top), intermediary relationship director at Pepper Money, speaking to Mortgage Introducer following the lender's recent first charge mortgage launch in Scotland. He argues that a significant portion of aspiring Scottish homeowners are giving up before they have spoken to anyone, and that specialist lending can reach them.
"There are so many people that have blips on credit files that think they can't get a mortgage, and it's awful," Barnard said. "We almost have to destigmatise the problem because those people probably sit at home at night thinking it's only them in the world, and they're not alone."
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The gap between ambition and confidence
Pepper’s Scotland Specialist Lending Study, conducted across more than 1,500 Scottish adults, found that 47% of non-homeowners believe they will never be able to buy. Among those with complex incomes – the self-employed, contractors, and those with variable earnings – that figure rises to 55%.
Barnard said the findings did not surprise him. "If you pin that back to the UK overall, where we've got 16.6 million people with a history of adverse credit, does it surprise me? Probably not." The bigger challenge, he said, is making sure people understand they are not alone and that solutions exist.
He described a pattern he hears repeatedly. A customer with a small credit blip approaches a broker and is told nothing can be done. They go home, rent for another year, try their bank, get turned down again. "It wasn't until they found a further broker that said, 'that's easy, we'll place it', and they placed it with Pepper. That's the kind of journey we're trying to shorten."
On adverse credit specifically, Barnard is clear that context matters far more than the blip itself. "If you look at a typical customer with a mark on their credit file over a three-year history, you can often put a ring around three months. They paid everything before, they paid everything since, and we can often pin that back to a life event – a bereavement, a divorce, a redundancy. Does that make them bad people? We don't believe so."
The rehabilitation model is central to how Pepper positions its lending. Of all deals that redeemed with the lender last year, 56% moved to a high-street lender or building society. "The day a mortgage completes with Pepper is the day the rehabilitation process starts," Barnard said.
What makes Scotland different
Barnard is candid that entering Scotland required more than flipping a geographic switch. The Scottish market operates on an "offers over" basis, with buyers submitting bids through solicitors rather than making direct offers. Valuations work differently too, with vendors commissioning the home report and lenders typically accepting a retype. Terminology for adverse credit differs in places. Embedding all of that into Pepper's systems, processes, and legal relationships took approximately five months of intensive internal work.
"This isn't as simple as throwing another half a dozen postcodes into our portal," he said. The lender launched across mainland Scotland with its full residential and complex buy-to-let range, including HMOs and limited company structures.
One distinction Barnard highlighted in Scotland's favour is conveyancing speed. The purchase process can move faster north of the border than in England and Wales, where, he said, the conveyancing sector "just takes quite some time to progress". England and Wales, he suggested, might have something to learn there.
Building relationships in Scotland
A thread running through Barnard’s view of the specialist market is the value of brokers having direct access to the people who make decisions. “A two-minute conversation with an underwriter at any stage of the application process is the best two minutes they’ll spend,” he said. “At the end of it, the case is either dead and needs replacing, or they know exactly what’s needed to get it over the line.”
Pepper regionalises those relationships so that the same brokers are speaking to the same people over time. One of the underwriters focused on the Scottish market is based there – something Barnard views as a meaningful commitment rather than a token gesture.
The lender has also appointed Michael Walsh as regional development manager for Scotland, bringing experience on both the specialist lending and broker sides of the market. Reception at launch events in Glasgow, Edinburgh, and Aberdeen had been, in Barnard’s words, “overwhelmingly warm”, with early business volumes in the first few weeks encouraging.
The message, he said, is simple. “We genuinely aren’t entering Scotland just to put products on a shelf. We want to build lasting relationships with brokers and customers and provide lending that reflects how people actually live and earn today because that’s so much different than it was 10 years ago.”
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