These gains show how lenders are harnessing technology to deliver a faster service to borrowers, responding to the challenges exposed by the Mini Budget.
The survey collected insights from 43 lenders across the UK from May 2024 to June 2024 and explored how lenders are using technology to support the origination and writing of their businesses, uncovering the barriers to efficient lending. The lenders included: high-street lenders, larger building societies, challenger and specialist banks, and smaller regional lenders.
Efficiency gains and changing lending patterns
Although high-street lenders have taken the lead in processing times, larger lenders now process applications in 11 days on average, while smaller regional lenders have significantly cut their time from 23 to 19 days in the last year. Unsurprisingly, challengers and specialist banks continue to face longer processing times, averaging 28 days due to their focus on more complex lending cases.
Despite these positive improvements in processing efficiency, the findings underscore the headwinds facing the buy-to-let sector. This year saw buy-to-let lending across all lenders fall back to 26%, down 3% from 2023, potentially due to rising rates and an evolving regulatory environment.
Lenders rely on broker distribution and technology to make advances
For the 43 lenders surveyed, 91% of mortgage applications were sourced through intermediaries in 2024. This is a marginal increase from 90% last year, reinforcing the critical role brokers play in supporting borrowers find the right product to suit their financial needs, and driving applications for lenders.
Technology is another key driver of success for lenders, with 75% of lenders rating their satisfaction with automation in the mortgage process between three and four out of five.
Looking ahead, 61% of lenders reported that their product launch processes have improved since the Mini Budget, with many attributing this to operational changes such as streamlining approvals and investing in new technologies. Over half (56%) also believed that they have made improvements in product criteria and policy changes, however larger societies and smaller regional lenders feared that they had fallen behind.
Steve Carruthers, Business Development Director at finova and MSO, said: “The mortgage market has historically been slower to innovate than other sectors, making it all the more exciting that lenders are finally embracing new tech and unlocking its potential. The Mini Budget exposed inefficiencies that have long plagued the industry and it's encouraging that lenders are now turning to tech to streamline processes and improve outcomes for borrowers. High-street lenders, with their greater resources, are leading the charge, but what’s really impressive is how smaller regional players are also making significant gains in cutting processing times.
“Technology must be harnessed as a co-pilot – not a replacement for humans – and our hope is that the developments highlighted in our report signal the beginning of an era where innovation drives real change for borrowers across the board.”
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