The Intermediary – April 2025 - Flipbook - Page 80
T E C H N O L O GY
Opinion
Mortgage lenders
must embrace AI
and innovation
E
conomic volatility,
higher interest rates,
imposed tariffs creating
market uncertainty,
and the recent changes
to Stamp Duty have
created an increasingly difficult
financial environment for prospective
homeowners.
Those hoping to access a mortgage
today face challenges that previous
generations did not, due in part to the
fact that mortgage lending processes
have not kept up with the realities of
modern life.
We recognise that technology must
play a bigger role in modern lending.
Our latest research reveals that 45% of
mortgage brokers believe lenders have
not moved quickly enough to address
the evolving needs of borrowers. With
that in mind, brokers want to see a
greater role for artificial intelligence
(AI) in the sector.
Complex borrowing
landscape
Homeownership remains a
fundamental aspiration for millions of
people across the UK. Despite striving
towards the same end goal, our
research reveals that the variation of
financial circumstances is greater now
than ever before.
A third of brokers have seen an
increase in buyers with fluctuating
incomes – such as self-employed
workers or those with multiple
income streams.
Furthermore, more than half
(55%) of brokers agree that customer
criteria and incomes are changing,
making traditional lending models
increasingly outdated.
Many borrowers now rely on
alternative financial support to step
onto the property ladder. A third of
brokers say they have observed a rise
80
The Intermediary | April 2025
GREG WENT
is interim chief lending officer
at Nottingham Building Society
in multi-generational buyers pooling
resources to afford a home. A further
31% have noticed more borrowers
leveraging Government schemes like
Help to Buy and Shared Ownership.
Time to catch up
Despite these changes in borrower
behaviour, lending practices have
remained largely stagnant. Our
research found that only one in five
Brits believe banks and building
societies have evolved to meet the
needs of modern working Britain.
This disconnect between lenders and
borrowers is a significant concern.
One area where the industry must
evolve is technology, particularly
AI. Our findings reveal that 58%
of brokers support the idea of AI
playing a greater role in mortgage
applications, with 30% in favour
of its use if properly regulated, and
a further 28% believing it could
streamline the process. However, 20%
of brokers remain sceptical, citing
concerns about safety and regulation.
AI-driven affordability models could
change this by assessing applications
with greater nuance, moving beyond
outdated ‘one-size-fits-all’ calculations.
There are platforms such as
MQube, Lending Metrics, and
Smoove, which have introduced more
streamlined services, demonstrating
that innovation can enhance both
efficiency and accessibility. Yet, the
mortgage industry as a whole has been
slow to embrace these advancements.
The case for innovation
Brokers are clear in their call for
lenders to take a more proactive
approach. More than half (57%)
believe lenders must develop new
products that address the financial
realities of today’s homebuyers.
Meanwhile, 26% of brokers want to
see a more flexible lending process,
and 27% are calling for mortgage
applications to be quicker and less
cumbersome. Nearly a quarter (23%)
believe lenders should embrace
technology and innovation to improve
the overall customer experience.
By integrating AI and other
technological advancements,
lenders can provide more accurate
affordability assessments, reduce
processing times, and enhance
decision-making processes. However,
underpinning all of this must be the
assurance that necessary regulatory
safeguards are in place.
Call to action
At Noingham Building Society,
we are commied to this evolution,
recognising that the future of
mortgage lending is one where
technology and human expertise
work hand in hand.
There is a pressing need for
lenders to rethink their approach
to affordability and mortgage
accessibility. Borrowers today are
navigating increasingly difficult
financial situations, and many are
frustrated by the hurdles they face
when securing a mortgage.
Lenders must act now to integrate
AI in ways that enhance both
efficiency and fairness.
Those that fail to innovate risk
being le behind. It is only by
listening to the concerns of brokers
and borrowers alike that we can create
meaningful change. ●
