Ask any broker what’s changed most in the mortgage market over the past decade, and they’ll likely point to regulation, rates or the shift towards digital platforms.
But beneath these headline shifts lies a more fundamental challenge, one that many lenders have yet to fully address. The way people live, work and earn has changed dramatically, and large parts of the industry are still playing catch-up.
We recently commissioned research among 500 brokers across the UK to better understand how the intermediary community views the current market and what they need from lenders moving forward. Encouragingly, more than four in five brokers (83%) told us they feel more optimistic about the market now than they did six months ago.
But that optimism comes with a warning: the propositions lenders offer doesn’t necessarily match the realities of borrowers’ lives today. In fact, nearly three-quarters (74%) of brokers said mortgage products and propositions haven’t kept pace with how customers’ finances and lifestyles have evolved. More than half (52%) went further, arguing that lenders have been too slow to adapt.
This hints not just at a product design issue, but a misalignment between existing lending models and the growing diversity of modern households.
We now have a borrower landscape that includes freelancers, gig workers, those with multiple income streams and families whose financial responsibilities don’t fit the typical single-income model of years gone by. The most up to date data shows that over one in five UK working adults (22.3%) – about eight million people – now earn their primary income through the gig economy or other non-traditional employment. Additionally, approximately 47% of the UK population now hold a second income stream, and seven in 10 young people have more than one income source.
Yet, many mortgage products and propositions still assume a predictable, linear income and a clear-cut borrower profile. That’s no longer reality for millions.
As brokers know all too well, the human side of homeownership is messier than a spreadsheet. And when products can’t flex to fit real life, it is brokers – and their clients – who feel the frustration first.
One in four brokers we surveyed told us that product innovation should be lenders’ top priority over the next year. That means designing mortgages that reflect income volatility without penalising borrowers for it. It means looking beyond simple salary slips to assess affordability more holistically. And it means ensuring that eligibility criteria don’t inadvertently lock people out of the market simply because they don’t tick a particular box.
There’s also a clear call for lenders to do more in embracing technology – not for its own sake, but to reduce friction in the application journey. Nearly a quarter (23%) of brokers pointed to this as a key area for development. Whether it’s better integration between systems, faster decision making, or clearer communication with intermediaries, brokers want a digital experience that enables them to spend more time advising, and less time chasing.
It’s equally important not to overlook support for vulnerable borrowers – a growing concern in the wake of the cost-of-living crisis. Another 23% of brokers said lenders need to offer stronger support in this area, whether through clearer product information, more flexible payment terms or signposting to relevant help. Vulnerability isn’t always visible, and our systems and processes must be sensitive enough to pick up on that.
None of this is about throwing out the fundamentals of responsible lending, far from it. But it is about recognising that responsibility also means inclusivity, and that flexibility can be built without compromising rigour.
We’re already working closely with intermediaries to identify where we can do more. We believe strongly in the value of broker insight. Not just as feedback, but as a strategic lens through which we shape our proposition. Brokers are the eyes and ears of the market, and we ignore them at our peril.
Ultimately, I believe this moment of optimism is a chance for the sector to reset. Confidence is returning, but if we want it to last, lenders must move beyond incremental tweaks and think bigger. Innovation is no longer a ‘nice to have’. It’s a requirement.
The mortgage market can’t afford to stand still while borrowers’ lives continue to evolve. Lenders that don’t keep pace will find themselves left behind, not just by their competitors, but by their customers too.
Greg Went is head of mortgage product and proposition at Nottingham Building Society
