Editor's note: This brief was summarised by The Property AI Newsroom from a report by Mortgage Solutions. Read the original article for full details.
Personalised Lending on the Rise as Mortgage Market Grows More Complex
The UK mortgage market is seeing a shift towards more personalised lending as borrower profiles become increasingly diverse, according to a report by Mortgage Solutions. Lenders are moving away from standardised criteria to better understand individual circumstances, reflecting changes in how borrowers earn and present their finances.
The report notes that defining an ‘average borrower’ is becoming more difficult, with more than half of first-time buyers now relying on multiple incomes. Many applicants, such as those combining contractor work with self-employment, do not fit traditional lending models and require lenders to assess multiple income streams separately.
Specialist lenders and building societies are highlighted as being well-placed to support these borrowers, often using experienced underwriters to take a holistic view of each application. The report states that flexibility in lending is less about changing policy and more about understanding the customer behind the application.
Recent reforms by the Financial Conduct Authority (FCA) are acknowledged as recognising the need for affordability assessments that reflect the realities of modern borrowing. However, the report points out that regulation alone does not determine lending decisions, and lenders must still ensure that borrowing remains sustainable.
For letting agents and inventory clerks, these developments may signal a broader range of tenant and landlord profiles entering the market, as more complex mortgage arrangements become common. The report concludes that as traditional borrower profiles become less relevant, the future of lending will depend on lenders’ ability to look beyond standard application forms and understand individual circumstances.
Source: Mortgage Solutions