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As we navigate the ever-changing landscape of mortgage lending, building societies and lenders are facing significant pressures to adapt to economic shifts, regulatory changes and evolving customer expectations. To help identify the key trends and challenges in the market, our gathered insights from over 40 lenders, including high-street banks, building societies and specialist lenders.

Here are some of the standout findings from this year’s report:

1. Affordability challenges remain a top concern

Rising inflation and interest rates have created a challenging environment for both lenders and borrowers. The survey reveals that many lenders are still grappling with affordability issues, particularly as the cost-of-living continues to rise. First-time buyer loans fell by 22.4% in 2023, the lowest since 2013, underscoring the financial pressures on potential homeowners. However, optimism is growing, as many anticipate potential base rate cuts later in the year.

2. Automation is key to improving efficiency

One of the most positive findings from the survey is the increased satisfaction with automation in the mortgage process, particularly in the Decision in Principle (DiP) stage. An impressive 82% of lenders reported being satisfied with their DiP automation, up from 75% last year. Automation is helping lenders enhance processing speed and improve customer experience, though challenges around data integration remain a focus for many institutions.

3. The offer process is improving, but completion remains a bottleneck

Lenders have made significant strides in automating the offer process, with many institutions reporting faster offer turnaround times. High-street lenders, for example, have reduced their average application processing time by 30%, from 14 days in 2022 to just 10 days in 2024. However, the completion stage continues to be manual for many lenders, especially smaller institutions, which slows down the overall process.

4. AI and cybersecurity are growing priorities

As mortgage technology continues to evolve, AI and cybersecurity are becoming crucial considerations for lenders. Many institutions are beginning to trial AI for underwriting and data modeling, with some seeing the potential to greatly enhance efficiency and accuracy. At the same time, cybersecurity threats are increasing, and lenders are investing heavily in protecting their systems from digital fraud and breaches.

5. Broker distribution continues to dominate

Among the lenders we surveyed, 91% of mortgage applications are being sourced through intermediaries, highlighting the critical role brokers play in the mortgage process. This figure emphasises the importance of brokers in helping lenders and borrowers navigate the volatile mortgage landscape and secure the most suitable deals. 

6. Green lending is gaining momentum

While the appetite for retrofitting properties has waned due to the cost-of-living crisis, green mortgages are still on the radar for many lenders. Some institutions are offering incentives for new builds with high EPC ratings, and there is hope that government support will encourage homeowners to invest in energy-efficient upgrades.

Looking ahead: preparing for 2024 and beyond

The 2024 Mortgage Efficiency Survey offers a detailed look at how lenders are responding to current market conditions and preparing for future challenges. From automation to AI, lenders are making strategic investments in technology to improve efficiency, reduce costs and enhance the customer experience. However, as affordability pressures persist, lenders will need to stay agile and adapt quickly to an unpredictable economic landscape.

Download the full report

To explore these insights in greater depth and learn more about the strategies being adopted by leading lenders, download the full from our website. This report provides a comprehensive overview of the current trends and offers actionable insights to help you navigate the evolving mortgage landscape.