More than half (55%) of Scottish adults with complex income who do not own their own home fear they may never get on the property ladder, according to new research from Pepper Money, highlighting the need for specialist lending solutions as borrowers navigate a mortgage market that does not always reflect the way people earn today.
One in five Scottish adults has a complex income, yet 54% of this group do not own a home. The findings from Pepper Money’s Scotland Specialist Lending Study show how borrowers with less straightforward finances can face additional barriers when applying for a mortgage, whether they are self-employed, work as contractors, have multiple income streams, irregular earnings or a history of adverse credit.
Among self-employed Scottish adults, 11% say they plan to buy a home to live in within the next year, pointing to a significant pool of potential buyers whose income may require a more considered assessment by lenders.
Adverse credit is also a significant consideration for would-be borrowers. More than one-third of Scottish adults have experienced adverse credit, and 42% of those with adverse credit are concerned about securing a mortgage. Missed payments are more common than many realise, particularly among younger adults, with 33% of 18- to 34-year-olds having missed a credit payment.
The research also shows that 47% of Scottish non-homeowners overall believe they will never be able to own their own home, rising to 55% among those with complex income, underlining the additional pressure felt by borrowers whose circumstances may not fit standard lending criteria.
Despite these challenges, aspirations to buy remain. Five percent of Scottish adults with complex income say they plan to purchase a home to live in within the next year, demonstrating that a cohort of prospective buyers may benefit from a more flexible approach to mortgage lending.
Paul Adams, Director of Sales at Pepper Money, said:
Many people in Scotland want to own a home, but their financial circumstances do not always fit neatly into standard mortgage criteria.”
“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.”
“That is where Pepper Money can help. Our specialist underwriting, combined with the expertise of brokers, means we can assess individual circumstances more carefully and support customers who may need a more flexible route to home ownership following the recent launch of our First Charge proposition in Scotland.”
Paul Adams,
Sales Director
at Pepper Money
Pepper Money launched its First Charge mortgage proposition in Scotland this September, offering residential and buy-to-let mortgage solutions through intermediaries. The launch responds to the needs highlighted by the research and builds on the lender’s established specialist lending expertise and Second Charge mortgage business, with dedicated regional broker support and a specialist approach to underwriting.