Are missed payments during the cost-of-living crisis now a major reason your clients are being turned down for mortgages?

Missed payments are no longer confined to traditionally vulnerable borrowers. We are seeing them across all walks of life, including middle Britain: people with decent jobs, mortgages and previously clean credit who are simply finding that the monthly numbers no longer add up. Higher food, energy, childcare, insurance and mortgage costs have steadily eroded disposable income, and for some households credit has become the buffer until eventually something gets missed. The frustrating part is that one difficult period can then follow a borrower for years, reducing lender choice and pushing up the cost of borrowing long after their finances have stabilised. The real underwriting question should be what happened, why it happened and whether there is good reason to believe it will happen again.

A missed payment can certainly reduce someone’s mortgage options, but it does not automatically mean they cannot get a mortgage. Lenders look at what was missed, how recently it happened, how serious it was and how the borrower has managed their credit since.

The biggest mistake is assuming all adverse credit is treated the same way. A single historic late payment can be viewed very differently from repeated missed mortgage or loan payments. It may mean fewer lenders, a higher rate or needing more deposit, but the right response is to understand the credit history properly before applying rather than firing applications at lenders and collecting more declines.

The worrying thing is that we're judging borrowers on financial difficulties they experienced during an extraordinary economic period, rather than who they are financially today.

A missed payment during the cost-of-living crisis doesn't automatically mean someone is financially irresponsible. For many, it was a choice between heating their homes, putting food on the table and paying every bill on time.

I wouldn't invent a percentage of declined cases without verified figures, but historic missed payments remain a significant factor in mortgage underwriting.

What frustrates me is the inconsistency. One lender might reject a borrower outright, while another could accept the same credit history, sometimes at a considerably higher rate or with a larger deposit.

Responsible lending is essential, but so is proportionate lending. A temporary financial setback shouldn't become a long-term financial punishment, particularly when someone can demonstrate sustained recovery.