Brokers are calling for greater investment in financial education after reporting a sharp rise in near-prime mortgage enquiries during 2025, according to new research from Atom bank.
The digital lender polled brokers during a recent webinar on near-prime lending, held following the publication of Atom bank’s inaugural Near Prime Index. The findings suggest that near-prime lending is becoming an increasingly prominent feature of advisers’ day-to-day workloads.
More than nine in 10 brokers, 93%, said they had seen an increase over the past year in customers with adverse credit or who would fail traditional credit scoring models. Almost three quarters, 74%, said they expect near-prime business to rise further in 2026.
Brokers also highlighted a need for improved financial education to help future borrowers avoid repeating common credit mistakes that can limit access to mainstream mortgage products.
The government has recently announced plans to include financial education within the national curriculum. When asked which topics should be prioritised, brokers most frequently pointed to education around the different forms of credit, cited by 22% of respondents.
Almost one in five said lessons on the real cost of borrowing and how debt can accumulate over time should be a core focus.
BREAKING MISCONCEPTIONS ABOUT NEAR-PRIME
The webinar was hosted by Paul Hunt, managing director of media agency Square 1 Media, and featured a panel including Richard Harrison, head of mortgages at Atom bank, Jonny Magill, chief commercial officer at broker Haysto, and Nakita Moss, head of lender at Twenty7tec.
Discussion centred on the growing scale of the near-prime market, with panellists noting that many affected borrowers are middle- to high-income earners who have experienced short-term financial pressure or specific life events rather than long-term financial difficulty.
Adverse credit is not limited to lower-income households.
Data from Atom bank’s Near Prime Index showed a significant proportion of near-prime borrowers have household incomes of between £75,000 and £150,000, underlining that adverse credit is not limited to lower-income households.
Panellists also observed that borrowers frequently underestimate the long-term consequences of relatively minor credit issues. Improved financial education, they argued, could help prevent many customers from encountering avoidable problems later in the mortgage process.
Technology was identified as an important tool in supporting brokers handling near-prime cases. Panellists said that incorporating adverse credit data earlier in the research process can lead to more accurate product sourcing, reduce adviser workload and help set clearer expectations for customers.
BETTER EDUCATION
Richard Harrison, head of mortgages at Atom bank, said: “Near Prime is now a mainstream part of the market, with our research highlighting the growing role it plays – and looks set to play – in the daily workloads of brokers across the country.
“What came through clearly in our webinar is that customers need more support and better financial education to help them understand borrowing, avoid unnecessary credit blips and navigate the mortgage process confidently.
“Demand for Near Prime lending is only likely to increase, as we see the continued ramifications of the budgeting challenges of recent years, so it’s crucial that lenders provide clear pathways back to Prime products as customers’ circumstances improve.
“Atom bank is committed to supporting these borrowers, combining flexibility, speed and criteria designed for the realities of today’s market.”
