New research ties borrower pessimism to launch of first charge range in Scotland
More than half of Scottish adults with complex income who do not own a home fear they will never get on the property ladder. The finding comes from new research by specialist lender Pepper Money, accompanying the launch of its first charge mortgage range in Scotland.
Pepper Money's Scotland Specialist Lending Study found that 55% of non-homeowners with complex incomes believe they may never own a property. That compares with 47% of Scottish non-homeowners overall.
The lender said one in five Scottish adults has a complex income, and 54% of that group do not currently own their home. The category covers borrowers who:
- are self-employed
- work as contractors
- receive income from multiple sources
- have irregular earnings
- carry a history of adverse credit
Adverse credit featured heavily in the findings. More than one-third of Scottish adults have experienced adverse credit, and 42% of that group said they were concerned about securing a mortgage. Missed payments were most common among younger adults, with 33% of 18- to 34-year-olds reporting a missed credit payment.
Despite the pessimism, demand for home ownership persists. Some 11% of self-employed Scottish adults said they plan to buy a home to live in within the next year. Among Scottish adults with complex income overall, 5% said the same.
Adams: brokers need lenders that "look beyond a tick-box approach"
"Many people in Scotland want to own a home, but their financial circumstances do not always fit neatly into standard mortgage criteria," said Paul Adams, director of sales at Pepper Money. "For customers who are self-employed, work as contractors, have multiple income streams, irregular earnings or a history of adverse credit, getting a mortgage can require a lender that looks beyond a standard tick-box approach."
Adams said Pepper Money's specialist underwriting, combined with broker expertise, would allow the lender to assess individual circumstances more carefully. He linked that approach to the launch of its first charge proposition in Scotland.
First charge launch follows established second charge presence
Pepper Money introduced its first charge mortgage products in Scotland this September, offering residential and buy-to-let solutions through intermediaries. The move builds on the lender's established second charge lending presence in the region. It is intended to give Scottish brokers greater access to solutions for borrowers whose needs fall outside standard high-street criteria.
The range is designed for borrowers with complex or variable income, recent self-employment, limited credit histories, previous adverse credit, or smaller and gifted deposits. It also extends to first-time landlords and those managing portfolios of up to 10 properties.
For residential purchases, Pepper Money will accept Home Report retypes, with exceptions for new-build and concessionary purchases. Buy-to-let cases will require full valuations. Underwriting will remain human-led, with experienced staff reviewing the full circumstances of each application. Cases can then progress through a broad panel of Scottish solicitors once an offer is issued.
For intermediaries, the research points to a segment of Scottish clients who may assume they are unmortgageable despite viable circumstances. That underscores the role brokers can play in matching complex-income cases with specialist criteria before an application is declined on the high street.
Pepper Money's Specialist Lending Study is now in its eighth edition and is conducted by YouGov on Pepper Money's behalf. The study is a detailed look at the views and impacts of mortgage customers.
