Atom Bank’s Near Prime Index report shows that according to brokers, cost of living pressures had become a more pronounced driver of Near Prime applications by the second half of 2025. Cost of living was cited as the main reason by 71% of agents surveyed, compared to 62% in the previous Index
First buyers also represent an increasing share of brokers’ Near Prime customers, while Atom’s customer data suggests the majority of Near Prime customers are first-time buyers
The call for more high LTV options was identified by more than a third of agents as the biggest barrier to first-time buyers submitting applications to Near Prime
Defaults remained the largest contributor to Near Prime status, occurring in 73% of Atom banking cases
Other key factors included increased reliance on consumer credit (56%) and the impact of life events (48%) according to brokers.
Demand for Near Prime is expected to continue to grow, with two-thirds (65%) of agents predicting a slight increase, and 12% predicting a significant increase.
According to the index, lenders’ capacity for adverse events is improving, with more than three-quarters (77%) of brokers reporting that interest in such deals from mainstream lenders has increased over the past six months, and one in ten (12%) seeing a significant increase.
The price premium that Near Prime borrowers face, compared to Prime borrowers, has declined over the past 12 months, brokers say, indicating competition is pushing prices down.
Commenting on the latest data, Richard Harrison, head of mortgages at Atom Bank, said: “The housing ladder only works if first-time buyers have access to it. However, as our latest Near Prime Index makes clear, accessibility increasingly depends on the extent to which lenders are more flexible to the borrower’s credit profile, whether that is due to past payment problems or simply the borrower having little significant credit history.”
He added: “A wider range of high LTV Near Prime products is essential, with the LTVs offered often being the key driver for lender selection. While brokers have reported increased competition among mainstream lenders, this progress may have stalled due to the current uncertainty in the market. We must hope that progress not only resumes once the conflict is over, but that we see it resulting in greater choice for borrowers at all deposit levels.”