Brokers are urging mortgage lenders to consider the opportunities AI could bring to the sector, as a flux in interest rates and stamp duty changes threaten homeownership aspirations, according to new research by Nottingham Building Society.
45% of brokers believe that, to date, mortgage lenders have not moved quickly enough to ensure they cater for the evolving needs of borrowers.
Brokers reported that the circumstances of borrowers today aren’t the same as they were for previous generations, with 55% of brokers agreeing that customer criteria and incomes are becoming increasingly varied.
A third of brokers reported an increase in buyers with fluctuating incomes, while the same amount reported an increase in multi-generational buyers. A further 31% also noted an increase in buyers using government schemes like Help to Buy and shared ownership.
The mortgage sector needs to catch up, brokers say
At the same time, consumer sentiment reveals a growing frustration with outdated lending practices that fail to reflect the realities of modern homebuyers. Earlier research from Nottingham Building Society found that only one in five Brits believe banks and building societies have evolved to meet the needs of modern working Britain when it comes to homeownership.
Six in ten (58%) brokers admit they’re open to the idea of AI playing a bigger role in the sector, with 30% believing it can play a role in mortgage applications but only if it is properly regulated, and a further 28% fully in support of it streamlining the process. It’s not all plain sailing though as a fifth (20%) of brokers remain sceptical about the use of AI in the mortgage process, either not wanting to see it involved until it’s safe and properly regulated or not wanting it to be involved at all.
While innovation is already rife in the sector, with new technologies like MQube, Lending Metrics, and Smoove able to provide more streamlined services to brokers, many argue that the mortgage industry has been slow to adapt.
To combat this, 57% of brokers believe that lenders must take proactive steps to develop new products that address the financial realities of today’s homebuyers.
There is also a strong call for mortgage providers to modernise their approach, with 26% of brokers seeking a more flexible lending process and 27% emphasising the importance of making mortgage applications quicker and less cumbersome. Nearly a quarter (23%) want to see lenders embrace technology and innovation to improve the overall customer experience.
Praven Subbramoney, chief lending officer at Nottingham Building Society, commented: “There is a pressing need for lenders to rethink their approach to affordability and mortgage accessibility. 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.”
