It doesn’t take much these days for a borrower to feel they’ve fallen out of favour with the system. A missed payment here, a short spell of higher spending there, and suddenly someone who’s always been financially responsible can find themselves labelled as higher risk by some lenders.
For brokers, these types of conversations are becoming more common with clients who seem to be doing everything they can from a budgeting perspective but still don’t fit neatly within the strict boundaries of mainstream lending.
And it’s not necessarily because their spending habits have changed dramatically, it’s more about the increasing financial pressures being placed on them.
PERSONAL DEBT
According to The Money Charity’s latest Money Statistics for September 2025, total UK personal debt reached £1.914.0 billion at the end of July, up £51.9 billion in just 12 months. Credit card balances alone rose by 6.2% to £75.5 billion, meaning the average household owes around £2,600 on cards. At the current average rate, it would take more than 27 years to clear that balance if only the minimum payment were made.
These figures highlight the pressure many households are under. They show people doing their best to budget and adapt yet still relying on credit to get by in a climate where the cost of almost everything – from energy and food to childcare and clothing – is rising far faster than wages.
For many, increasing debt isn’t a choice but a consequence of trying to keep pace with everyday life.
EMOTIONAL IMPACT
It’s also clear that money and emotion have never been so closely linked. The Association of Mortgage Intermediaries (AMI) recently found that 78% of consumers feel emotionally affected by the current economic climate when making financial decisions, and more than half said the impact was “big.”
Among mortgage holders, that number climbs to 83%, while 87% of parents with children under 18 admitted feeling the strain.
For brokers, those statistics won’t come as any great surprise. From my conversations with our intermediary partners, it’s clear that an increasing number of client discussions now focus on affordability, or on how a minor credit blip can become a major obstacle with high street lenders.
Life events, too, are holding back credit-worthy borrowers because of rigid systems that rarely look beyond the numbers.
At Foundation Home Loans, we’ve always believed that credit doesn’t define character. It’s a snapshot, not a full picture. A short spell of difficulty such as a contract ending, a temporary reduction in hours, or a cost-of-living squeeze shouldn’t serve to erase years of robust financial behaviour.
HUMAN APPROACH
That’s why a more human approach to lending has never been more relevant. Manual assessment and thoughtful underwriting give brokers and clients the space to explain the “why” behind the data, and that’s often where the difference is made.
A professional who used a credit card to bridge an unexpected month of childcare costs. A self-employed client whose income dipped temporarily and created subsequent credit issues. A first-time buyer with a small, satisfied default from years ago. In these cases, context matters far more than the credit file itself. When a lender can listen, understand, and weigh that context properly, it opens possibilities that automated systems simply can’t see.
Specialist lenders are proving that you can combine detailed risk assessment with genuine empathy, and brokers have become increasingly vital in guiding a wider range of clients through what feels like a more unforgiving landscape.
Every market cycle produces its share of “overlooked” borrowers, those whose credit history or income complexity keeps them just outside the mainstream. But many of these clients aren’t asking for exceptions; they’re asking for understanding.
By working together, we can make sure those doors don’t stay closed for long. Because when a borrower has the means, the discipline and the determination, they deserve a fair chance to move onto and up the property ladder.
Grant Hendry is director of sales at Foundation Home Loans
https://themoneycharity.org.uk/media/September-2025-Money-Statistics.pdf
