Nearly three-quarters, or 74%, of brokers say mortgage products have “failed to keep pace” with the changing financial circumstances of borrowers.
One in four brokers say product innovation, such as more flexible home loan options for non-traditional employment patterns, income types, and family structures, “must be the number one focus for lenders in the year ahead”.
The findings come from a survey of 500 mortgage brokers commissioned by Nottingham Building Society and carried out by data body Censuswide last month.
The poll finds that 23% of brokers want to see better support for vulnerable borrowers, while the same proportion would like lenders to adopt new technologies to streamline applications.
However, 83% of brokers said they felt more optimistic about the state of the mortgage market than they did six months ago.
This comes despite the growing cost-of-living squeeze, which today saw inflation rise to 3.8% in the year to July, from 3.6% in June.
The poll said that “growing confidence” among brokers “reflects a sense that the market is stabilising”.
Earlier this month, the Bank of England cut the base rate by a quarter point to 4% from 4.25%, taking the interest rate to its lowest level since March 2023.
This was the central bank’s third quarter-point cut of the year and the fifth since last August.
Nottingham Building Society head of mortgage product & proposition Greg Went says: “It is encouraging to see signs of confidence returning to the mortgage market.”
“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.
“Many [brokers] are telling us that outdated lending criteria risk locking good customers out of the market.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.”
