Over a third (34%) of people declined for a mortgage were never referred to a specialist lender, despite being eligible, Shawbrook research has found.

The firm’s Home A-Loan report, which looks at specialist lending and the struggles facing prospective buyers, revealed that the key reasons cited for declined mortgage applications include volatile income (26%), poor credit score (25%), missed payments (21%) and unaffordability (21%).

Shawbrook said these profiles that specialist lenders are designed to support and can impact a variety of people, such as the self-employed, contractors and those with past credit blips.

Furthermore, 25% of consumers actually understand what a specialist lender is and how to access one, while 46% have heard of the term but don’t know what it means. Shawbrook said that this can lead thousands of potential homeowners in the dark.

The bank added that specialist lending can be a solution for people turned away by high-street lenders. For people who sought more tailored help via a mortgage broker, 97% of borrowers found that right lender with the help of their broker and the same proportion valued their broker’s specialist market knowledge.

A further 95% also said that brokers made the application easier, although 22% of applicants had actually used a broker. Shawbrook stated that this demonstrates the need for increased knowledge on the support available for those on their homeownership journey.

Commercial director for retail mortgages at Shawbrook, Steve Griffiths, concluded: "There is a concerning lack of support for those with unconventional profiles, whether this is due to their employment type or credit history - and this can often stop people's homeownership goals in their tracks, without any explanation or advice for next steps. Specialist lending is a solution to this dead-end, but it continues to be something that only a minority of borrowers understand, or are even aware of.

"Everyone deserves an equal footing on the property ladder, especially as the market and economy continues to change, and there isn’t a cookie-cutter image of the perfect borrower. Too many people think a ‘no’ from one lender means the end of the road. In reality, there may be a perfectly viable solution - but the industry needs to do a better job of helping people find it."

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