New research from Nottingham Building Society suggests confidence is returning across the UK mortgage market, but warns that lenders risk falling behind if they fail to adapt to the changing circumstances of borrowers.
A survey of 500 mortgage brokers found that 83% feel more optimistic about the state of the market than six months ago, reflecting a sense of stabilisation despite higher rates and cost-of-living pressures.
However, nearly three quarters of brokers (74%) said mortgage products have not kept pace with the realities of modern financial lives, while 52% believe lenders have been too slow to respond to evolving customer needs.
The findings show a clear demand for innovation, with one in four brokers (25%) identifying more flexible mortgage options as the top priority for lenders in the year ahead.
A further 23% said technology must be used to simplify the application process, and 23% also highlighted the need for greater support for vulnerable borrowers.
Many brokers reported that the rise of self-employment, freelancing and gig economy work means increasing numbers of customers face barriers when applying for mortgages.
Greg Went, head of mortgage product and proposition at Nottingham Building Society, said: “It is encouraging to see signs of confidence returning to the mortgage market.
“Coupled with the recent Bank of England Base Rate cut, and the potential for further cuts this year, this could offer further relief for some borrowers and stimulate more activity across the sector.
“But the message from brokers is clear: lenders must ensure they keep pace with changing lifestyles.
“People’s lives and finances have changed, from income patterns to household structures, and mortgage products need to remain suitable.
“We are in constant dialogue with brokers, and their feedback has never been more important.
“Many are telling us that outdated lending criteria risk locking good customers out of the market.
“Whether it is supporting borrowers with complex incomes, simplifying journeys through technology or offering tailored support to those in vulnerable circumstances, lenders have a responsibility to adapt.
“We remain committed to building a fairer, more accessible mortgage market. That means taking bold steps, embracing innovation and ensuring our products reflect the diversity of modern life.”
