New research from Nottingham Building Society reveals that confidence is increasing across the mortgage market, with brokers around the UK reporting a more positive outlook. However, this renewed optimism is accompanied with a warning that, unless lenders accelerate innovation, they risk falling out of step with the needs of modern borrowers.
The survey of 500 mortgage brokers found that more than four in five (83%) brokers feel more optimistic about the state of the mortgage market than they did six months ago. Despite rising rates and the cost-of-living squeeze, this growing confidence reflects a sense that the market is stabilising.
However, this optimism is tempered by concern that mortgage products are no longer fit for purpose for the reality of modern borrowers’ lives. Nearly three quarters (74%) of brokers say that current mortgage products have failed to keep pace with the changing financial circumstances of UK borrowers. More than half (52%) go further, saying lenders have been too slow to respond to evolving customer needs, suggesting that while confidence may be returning, the sector is at risk of complacency.
The findings also show that demand for innovation is rising sharply. One in four brokers (25%) say product innovation, including more flexible mortgage options catering to non-traditional employment patterns, income types, and family structures, must be the number one focus for lenders in the year ahead. Meanwhile, 23% of brokers want to see lenders adopt new technologies to streamline the application process, while 23% also cite better support for vulnerable borrowers as a key area for development.
These calls reflect a changing mortgage landscape in which increasing numbers of borrowers fall outside the traditional ‘9-5’ mould. With more people freelancing, self-employed or working in the gig economy, many face barriers when it comes to proving affordability or fitting lender criteria. Brokers are seeing this shift first-hand and are urging lenders to act.
However, the research highlights clear areas of opportunity. Digital tools and streamlined processes were identified as a priority by over a fifth of brokers, while growing awareness of financial vulnerability prompts calls for more tailored support and education from lenders.
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.”
