Mortgage application time plummets according to new report
High street mortgage lenders have reduced average processing times by 30% in 2024, according to a new survey published by finova and MSO.
The firms reported that the average processing time for applications has dropped from 14 days in 2022 to just 10 days this year, highlighting the impact of technology adoption in response to challenges exposed by the mini budget.
The 2024 Mortgage Efficiency Survey, conducted between May and June 2024, gathered insights from 43 lenders across the UK, including high street lenders, building societies, challenger banks, specialist banks, and smaller regional lenders. It explored how these institutions are using technology to enhance mortgage origination and identify barriers to efficient lending.
High street lenders led the way with an average processing time of 10 days, while larger lenders reported a slightly longer time of 11 days.
Smaller regional lenders improved their performance, reducing processing times from 23 days to 19 days over the past year. Challenger and specialist banks, which often handle more complex cases, saw longer average processing times of 28 days.
The report also highlighted a decline in buy-to-let lending, which accounted for 26% of total lending in 2024, down from 29% the previous year. Rising interest rates and regulatory changes are likely factors contributing to this downturn, the report said.
Meanwhile, intermediaries continue to play a vital role in the mortgage market, with 91% of applications sourced through brokers in 2024 – a slight increase from 90% in 2023, reinforcing the importance of brokers in helping borrowers navigate product options and supporting lenders in securing new business.
Technology has also become a key factor in driving efficiency, with 75% of lenders rating their satisfaction with automation in the mortgage process between three and four out of five. In addition, 61% of lenders reported improvements in their product launch processes, often citing streamlined approval processes and increased technology investment. However, some smaller regional lenders and larger societies expressed concerns about lagging behind in these areas.
“The mortgage market has historically been slower to innovate than other sectors, making it all the more exciting that lenders are finally embracing new tech and unlocking its potential,” said Steve Carruthers (pictured), business development director at finova and MSO. “The mini budget exposed inefficiencies that have long plagued the industry, and it’s encouraging that lenders are now turning to tech to streamline processes and improve outcomes for borrowers.
“High street lenders, with their greater resources, are leading the charge, but what’s really impressive is how smaller regional players are also making significant gains in cutting processing times.
“Technology must be harnessed as a co-pilot – not a replacement for humans – and our hope is that the developments highlighted in our report signal the beginning of an era where innovation drives real change for borrowers across the board.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
