As borrowers' needs evolve, brokers call for innovation to streamline processes
Mortgage brokers are urging lenders to accelerate innovation, particularly through artificial intelligence (AI), as shifting financial conditions make homeownership increasingly challenging for many borrowers.
New research from Nottingham Building Society highlights concerns among brokers that lenders have been slow to adapt to evolving borrower circumstances. The study found that 45% of brokers believe lenders have not moved quickly enough to meet changing borrower needs, as fluctuating interest rates and stamp duty adjustments reshape the market.
According to the research, 55% of brokers reported that borrower incomes and financial situations are becoming more diverse than in previous generations. A growing number of homebuyers are also seeking external financial support to secure a mortgage.
One-third of brokers observed an increase in borrowers with fluctuating incomes, while another third reported a rise in multi-generational buyers pooling resources. Additionally, 31% of brokers noted a greater reliance on government schemes such as Help to Buy and Shared Ownership, indicating the varied approaches buyers are using to enter the housing market.
Consumer sentiment suggests that many borrowers feel lending criteria have not kept pace with modern financial realities. Earlier research from Nottingham Building Society found that only 20% of UK consumers believe banks and building societies have adapted to contemporary working patterns and homeownership challenges.
Brokers are divided on the role of AI in mortgage lending. While 58% are open to AI adoption, opinions vary on its implementation. Of those in favour, 30% support AI’s involvement in mortgage applications if properly regulated, while 28% see it as a way to streamline processes. However, 20% remain sceptical, expressing concerns about safety and regulation.
Despite advancements in mortgage technology from firms such as MQube, Lending Metrics, and Smoove, many brokers feel the industry has been slow to modernise. The research found that 57% of brokers believe lenders must introduce new products to align with borrowers’ financial realities.
Brokers are also calling for a more flexible lending process (26%), faster and less cumbersome mortgage applications (27%), and greater use of technology to improve the customer experience (23%).
“There is a pressing need for lenders to rethink their approach to affordability and mortgage accessibility,” commented Praven Subbramoney (pictured), chief lending officer at Nottingham Building Society. “Borrowers today are navigating ever more complex financial situations and are becoming increasingly frustrated with the hurdles they face within the mortgage process.
“Our industry must respond with innovative solutions to help people traverse the system more efficiently. Only by listening to the concerns of brokers and borrowers alike can we achieve meaningful solutions which will improve the process and make homeownership more achievable.
“We urge lenders to take these concerns seriously and to prioritise innovation and flexibility across the sector, ensuring that all customers, regardless of their financial background, have access to the opportunities they deserve.”
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