First time buyer mortgage with £80 telecoms default on credit record

RHF2020

My wife are I are hoping to buy our first home next year. We're looking up to £250k, with a deposit likely to be c. £30k. As part of preparing, I have signed up with Experian and have found an £80 default from September 2019 on my credit record. This relates to an old phone contract with Vodafone, which I thought had expired but was still being charged for. I won't go into too much detail, but it's a complicated story which involved me emigrating to Australia from 2015 - 2017, coming back and taking out a new Vodafone contract which they failed to join up up with my old records. I'm currently in process of complaining with CISAS, but Vodafone are proving incredibly stubborn in sticking to their position.

I'm interested to know how hard I should push to get this removed from my record, and would consider involving the likes of my MP and media outlets if I need to. However, I'm interested to know how much this would actually matter if I apply for a mortgage next autumn. The key facts essentially are:
 - After September 2021, the date of the default will be over 2 years old and will have less impact,
 - I can't see us being able to save to a 15% deposit, unless we buy a smaller house than we could otherwise afford,
 - Our household income is over £80k with no dependents and we've both been employed in our current roles for over 2 years and have been unaffected by Covid, so absolutely no concerns over affordability. 
 - My wife's credit report is unblemished, though she does not have a long history of using and paying back credit.
 - This really is a one-off default for a tiny amount which I could explain and evidence if challenged.

How would this affect my mortgage chances? I understand not many providers are offering LTVs less than 85% now and it's a lenders market. Even if my default is a one-off, tiny amount due to unusual circumstances, is it not easier for banks simply to lend to somebody without the blot on their record?

K_S

@RHF2020 I don't know what the market will look like in a year's time, but assuming the 90% market is a bit more competitive than today I wouldn't expect a 2 year old £80 comms default to derail your chances of borrowing 250k with an 80k income (so only slightly above 3x).

Having said that, I would still pursue the CISAS complaint to its natural end.

ACG

I cant see your MP being interested in your £80 mobile phone default personally. If he/she is, they are a lot better than ours. 

If the market is like it is now, there is probably no chance. 
If the market is like it was last year, there is every chance. 
Chances are it will be somewhere in the middle.
Hows that for sitting on the fence?!

You have time on your side by the looks of it, try to get it removed. If you cant, I think you are going to need to satisfy it (sooner rather than later) to give yourself the best possible chance of getting a 90% Mortgage. It is not just the default you are contending with, but that you spent 2-3 years of the last 6 years out of the country. 

RHF2020

Hi,
Thanks both. One more quick question - we managed to get a DIP from Nationwide, just to see how we stood more than anything (obviously it will expire before we're actually in a position to buy). Is this a good sign? Would they have picked up on the account in question through the soft check involved with the DIP? Or would it hold up the deal at a later date when they do a harder credit check?

ACG

I think Nationwide use one provider at DIP and another at application. It could be a case that it has not been picked up yet. You will only know when you come to make a full application.

K_S

RHF2020 said:

Hi,
Thanks both. One more quick question - we managed to get a DIP from Nationwide, just to see how we stood more than anything (obviously it will expire before we're actually in a position to buy). Is this a good sign? Would they have picked up on the account in question through the soft check involved with the DIP? Or would it hold up the deal at a later date when they do a harder credit check?

 @RHF2020 It's definitely a good sign but as ACG said there's no surety that the particular default on Experian was picked up.