The near prime index, which is set to be carried out biannually, highlighted the need for the mortgage industry to better support borrowers with some form of adverse credit history as economic challenges and missed bill repayments damage peoples credit profiles.

The H1 2025 index also made key findings such as that around a fifth of the lender’s near prime cases involved households with gross incomes of £75,000 to £100,000, while 10% involved households with incomes of £100,000 to £150,000.

It also found that over half (52%) of near prime cases were for first-time buyers, and that brokers reported the biggest concerns among their near prime clients being high interest rates (39%) and the fear of being rejected (30%).

Meanwhile a higher proportion of near prime customers are self-employed than employed, suggesting the income fluctuations of self-employment can dent a person’s eligibility for prime finance, according to Atom.

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Broker observations reported that economic pressures and an increase in ‘buy now, pay later’ services will increase demand for near prime mortgage options, while lenders needed to embrace a more ‘common sense’ approach, assessing cases based on their individual merits, including more competitive pricing, and basing cost on actual risk which will open up the market to more borrowers.

Brokers also observed that tech should pay a more positive role, while borrowers needed more education about the behaviours that push them into the near prime category, as well as how to get out of it.

Richard Harrison, head of mortgages at Atom bank (pictured above), commented: “This inaugural near prime index has allowed us to take the pulse of what’s happening in the mortgage market for borrowers with imperfect credit scores.

“And what’s clear is that while this is a segment of the market which seems set to grow, brokers are frustrated with the approach of some lenders.

“Near prime is not something which only applies to a certain subset of borrowers, a single payment issue can have a large impact on a borrower’s record, and they are often driven by a life event or incident rather than ill-discipline.

“As a result, it’s vital for lenders to be more open minded, to treat such cases proportionately and based on the individual factors at play.”