Atom bank’s inaugural ‘Near Prime Index’ calls for greater education, flexibility and automation

• Inaugural Near Prime Index combines economic statistics, Atom bank lending data and broker insights
• Economic challenges and growth of ‘buy now, pay later’ services forecast to increase need for Near Prime in years ahead
• Brokers call for more understanding from lenders and better use of technology

Atom bank, the UK’s highest ranked bank on Trustpilot, has published its inaugural Near Prime Index, concluding that education, flexibility and automation are key to the future development of the market.

The Near Prime Index will be carried out biannually, and brings together the latest economic insights, Atom bank’s lending data, and the views of mortgage brokers from across the country.

The H1 2025 Index highlighted the clear need for the mortgage industry to better support borrowers with some form of adverse credit history, given the economic challenges of recent years and the millions of households whose missed bill repayments have damaged their credit profile.

Key findings from the Index include:

• Credit issues can impact all households, not just those on lower incomes - around a fifth of Atom’s Near Prime cases involved households with gross incomes of £75,000-£100,000, while 10% involved households with incomes of £100,000-£150,000.
• More than half (52%) of Atom’s Near Prime cases were for first-time buyers, highlighting the crucial role Near Prime lending plays in helping borrowers access the housing market in the first place.
• A higher proportion of Atom’s Near Prime customers are self-employed than employed, suggesting the income fluctuations of working for yourself can dent a person’s eligibility for Prime finance.
• Brokers reported the biggest concerns among their Near Prime clients being high interest rates (39%) and the fear of being rejected (30%).

What brokers need from Near Prime lenders

The report showcases brokers’ experiences with lenders in the Near Prime space, and their hopes for the future.

Observations from brokers include:

• Economic pressures and the growing prevalence of ‘buy now, pay later’ services will mean a growing demand for Near Prime mortgage options
• Lenders need to embrace a more ‘common sense’ approach, assessing cases based on their individual merits. This would include more competitive pricing, with lenders basing cost on actual risk, which in turn will open up the market to more borrowers
• Technology should play a positive role in supporting Near Prime borrowers, rather than acting as a ‘computer says no’ barrier.
• Borrowers need more education about the behaviours that push them into the Near Prime category, as well as how to get out of it.

Atom bank has repeatedly broken internal records for Near Prime applications and lending over the last 18 months, including its highest ever month for activity in September, demonstrating the clear need for such products from more mainstream lenders.

Richard Harrison, Head of Mortgages at Atom bank, commented:

“This inaugural Near Prime Index has allowed us to take the pulse of what’s happening in the mortgage market for borrowers with imperfect credit scores. And what’s clear is that while this is a segment of the market which seems set to grow, brokers are frustrated with the approach of some lenders.

“Near Prime is not something which only applies to a certain subset of borrowers - a single payment issue can have a large impact on a borrower’s record, and they are often driven by a life event or incident rather than ill discipline. As a result, it’s vital for lenders to be more open minded, to treat such cases proportionately and based on the individual factors at play.”

David Castling, Head of Intermediary Distribution at Atom bank, added:

“The report points to a need for innovation, especially in generating more high LTV options. We have seen striking levels of demand since increasing our maximum LTV on Near Prime to 90%, demonstrating how valuable such products are. Technology is too often seen as a barrier, with automated assessments making life harder for borrowers with adverse credit. But, when applied properly, it will mean Near Prime borrowers enjoy the same certainty at pace which is available to Prime applicants.

“However, the key remains education. This outlines the value of the advice process, with brokers at the forefront of clearing up misconceptions about Near Prime, not only helping clients understand why they have dropped out of Prime eligibility, but helping them return to Prime status. Lenders must make that path back to Prime as straightforward as possible - a minor payment bump in the road should be treated as such.”

ENDS

For Square 1 Media: Paul Hunt, paul@square1media.co.uk 07912 103971 John Fitzsimons, john@square1media.co.uk 0779 367 6977

For Atom: Robbie Steel, robbie.steel@atombank.co.uk 07538 775 701

About Atom bank

Atom bank is the UK’s highest rated bank on Trustpilot, and is on a mission to make the experience of borrowing and saving faster, simpler and better value than anyone else. The bank launched operations in April 2016 as the UK’s first app-based bank, and offers award-winning mortgages and savings through its app, alongside secured business lending for small and medium-sized enterprises.

Based in the North East of England with a team of nearly 600 people, Atom is here to ​​change banking for the good, for the better, and for everyone. This means focusing on customers’ needs, delivering better value than the incumbents, providing an exceptional app-based experience and offering award-winning customer support via phone, chat, email and social channels. The bank has some of the best customer service credentials in the UK, having achieved 5-star ratings on both the iOS and Android App Stores, whilst consistently delivering Net Promoter Scores (NPS) in the high 80s.

Based in Durham, Atom is an engaged and active member of the North East Community. In 2022 Atom signed a five-year Memorandum of Understanding with Durham University to progress key research and diversity initiatives. The region has one of the highest levels of youth unemployment in the UK and Atom is passionate about addressing the critical digital skills gap and helping develop young people and other groups that are under-represented within the industry. In 2024, Atom purchased 25 acres of newly planted broadleaf woodland in Northumberland to sequester 7000 tonnes of carbon, which will account for all its operational emissions since founding. This forms part of the bank’s pledge to be climate positive by 2035, becoming the first UK bank to make this commitment.

As of November 2021, all employees enjoy a four-day working week, after Atom became the largest company - and only bank - in Britain to introduce the policy for all employees, with no reduction in salary.

The Atom executive team are highly experienced, having built and run some of the most well-respected banks in the UK. CEO Mark Mullen has 30 years’ experience in the sector and was previously CEO at the multi- award-winning telephone and internet bank first direct. The team is supported by a strong non-exec board, chaired by Lee Rochford.