According to research from specialist mortgage lender Together, which surveyed around 7,000 adults, the reasons behind rejections ranged from adverse credit to being turned down for government schemes.

Around 26% said they had planned to use government schemes like Help to Buy or shared ownership but they had been rejected.

Nearly a third said having a County Court Judgement (CCJ) was a key reason for being turned down for a mortgage.

Bad debt incoming

Almost a fifth of all UK adults are categorised as having adverse credit.

Adverse credit covers those who have missed payments on a loan or credit card. Of those surveyed, 7% said they had missed payments on unsecured loans while 6% said they had entered into debt management plans .

Financial rejection also takes an emotional toll, with 32% saying it left them feeling worried about the future, 26% said it made them depressed and 23% said it made them feel like a failure.

Pete Ball, personal finance chief executive at Together said: “It is imperative that the mortgage market works towards becoming more inclusive, especially as today’s the cost of living crisis will likely have a long-term impact on our financial wellbeing.

“As the cost of living crisis shows no signs of letting up, we anticipate the proportion of those with adverse credit is set to rise in the immediate-term. We will see more potential borrowers being overlooked by some mainstream lenders because of factors such as missing a bill payment on a credit card or another type of unsecured loan.”

He continued: “These credit blips may date back years – or be something the applicant is completely unaware exists – but can have repercussions on their ability to successfully apply for a mortgage.”