In this In Focus exclusive, Thomas Eyre, CEO and Co-Founder at Loqbox, explores how mortgage brokers and advisers can rethink the way they engage younger clients by moving beyond traditional credit labels and recognising “pre-prime homeowners” as the next generation of borrowers.
In consumer credit, labels such as “subprime” and “prime” are convenient shorthand. They help segment risk and price products, but when it comes to younger adults and first‑time buyers, they can obscure something vital: direction of travel.
A 25‑year‑old renter with a thin credit file is often treated as inherently higher risk, even when they are paying rent on time and progressing at work. On a screen, that profile may look “sub‑prime”, but that label can badly misrepresent what is really going on.
For mortgage brokers and advisers, this is a clear missed opportunity. There is a growing pool of younger customers who look “sub‑prime” on paper today but are in fact on track to become exactly the kind of reliable clients lenders want in the future.
The hidden pipeline of “pre‑prime” buyers
By “pre‑prime homeowners”, we mean people who are not yet “prime” on paper, but whose behaviour and trajectory clearly point in that direction.
Two groups sit most clearly in this space. The first is young adults taking on full financial responsibility for the first time, juggling rent and bills in a tough cost‑of‑living environment. Many do not realise that thin credit can be as restrictive as bad credit until they hit barriers such as rejected rental applications or costly loans.
One clear sign of this pressure is that over one in five Gen Z adults (21%) have already been declined for a credit card, often just as they are trying to build independence.
The second group is people rebuilding after shocks such as job loss, relationship breakdown or unexpected bills. They are motivated to improve, but their data is still dominated by the most difficult moments.
In the traditional model, brokers and advisers meet these customers only once a deposit is saved and a property is in sight. By then, the behaviours that shape eligibility and pricing have already accumulated.
Some files are weighed down by late bills, missed Buy Now, Pay Later instalments and persistent overdrafts; others are almost blank because borrowing has been avoided. In both cases, younger people are surprised to find that their everyday decisions have quietly limited their options.
Both groups contain large numbers of future first‑time buyers. Seen only through a “sub‑prime” lens, they risk being priced out or discouraged. Seen earlier as “pre‑prime homeowners” on a journey, they form a valuable pipeline of future clients. Too often, however, contact comes so late that there is almost no room left to improve the outcome.
From gatekeeper to guide
This is not just about confidence. Over half of Gen Z (51%) either believe using Buy Now, Pay Later does not affect their credit score or are unsure, and only 31% realise that being on the electoral roll can improve it. When so many young adults are navigating credit with partial or inaccurate information, avoidable mistakes build up long before they ever speak to a broker.
To support younger clients more effectively, brokers and advisers can adjust their role in three ways.
– Look beyond labels: Treat scores as a starting point, rather than a verdict. A thin file or marginal band should trigger questions about intent and behaviour, so younger and rebuilding clients are seen as “pre‑prime” with potential rather than fixed risks.
– Start the relationship earlier: Bring the first meaningful interaction forward by years. Offer simple explanations of how everyday decisions affect borrowing, plus brief “health checks” and occasional check‑ins, so applications contain fewer surprises.
– Focus advice on behaviour: Avoid relying on short‑term score boosts or product tweaks that do not change habits. Build guidance around small, repeatable behaviours, paying bills on time, keeping borrowing manageable and making regular payments visible on a file, so clients reach the application stage with genuine, long‑term improvements.
Why backing “pre‑prime homeowners” makes sense
Helping younger clients turn “pre‑prime” potential into prime‑ready reality supports a healthier housing market. It reduces “computer says no” moments for people who are doing their best and gives advisers a more meaningful role in their financial lives.
There is also clear commercial logic to this approach. Clients who have had time and guidance to build a track record are less likely to generate failed applications or last‑minute issues, which means less wasted effort for advisers.
A small shift with long‑term impact
The next generation of homeowners will not arrive with perfect files and pristine labels. Brokers and advisers who treat them as a “pre‑prime homeowner” pipeline to be nurtured, rather than a problem to be filtered, will be better placed to support both clients and business growth.
Shifting from labels to direction of travel, and from quick score fixes to genuine behavioural progress, can help turn today’s “pre‑prime” renters into tomorrow’s confident, mortgage‑ready homeowners.
