The study of over 7,000 consumers, carried out in partnership with economist Dr John Glen, also predicts that as many as 500,000 mortgage applications will be dependent on specialist lenders in the future, as the overall UK residential mortgage market is set to expand by 56% over the next eight years.

According to Dr Glen, there are two key factors underpinning the forecast growth in the specialist finance sector, one of which being the shorter-term risk appetite of mainstream lenders.

The second main factor is the potential rise in the number of homeowners which fall outside of traditional mortgage selection criteria, as structural changes — such as the growing trend towards flexible working and the emergence of the non-nuclear family — alter housing needs.

In the UK, 53% of the adult population who took part in the latest study fall into one or more criteria category classed as ‘non-standard’, suggesting there is a large existing demand for an even more flexible lending landscape.

Having non-standard income (including multiple and complex incomes or being self-employed) was cited by 22% of respondents as one of the main reasons for being rejected for a mortgage.

Having thin or impaired credit or being over 55 or divorced and considered a non-standard profile (both cited by 21% of participants) also worked against applicants, as did being in a non-standard buying situation (26%), like shared ownership, or wanting to buy a non-standard property (12%).

According to the study, this fuels an increasing need for support from specialist lenders.

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If the forecast growth in the specialist residential mortgage market does take place, this could potentially have a halo effect in terms of expanding homeownership, as Dr Glen anticipates a fifth of new specialist mortgages (approximately 100,000 applications) would come from borrowers who have not previously had a mortgage.

Together’s study backs this up, with 13% of respondents who have never made a mortgage application saying this was because they expected to be rejected or be deemed ineligible from the get-go.

“At a time when the government is seeking to extend homeownership, this study shows that as many as half a million future applicants could be locked out of the mortgage market without the support of specialist lenders,” said Dr Glen.

“This highlights systemic issues with the mainstream mortgage process, which currently bars many potential buyers who have non-standard criteria.”

Gerald Grimes, group CEO designate at Together, added: “Our research into the residential mortgage market highlights the growing need for specialist lenders and the problems faced by borrowers who are categorised as ‘non-standard’ in realising their ambitions to own their own homes. 

“The UK’s mainstream mortgage system just isn’t adapting fast enough to how we live — every year, an increasingly large group of potential homeowners must navigate a needlessly complex, intrusive, and time-consuming mortgage journey, with many facing outright rejection at the end of it.

“If our aim is to support ambition and make homeownership more inclusive and achievable, it's time the industry, supported by the government, rethinks how borrowers can access finance to realise their dreams of homeownership.”