Almost three quarters (74%) of brokers have stated that mortgage products are no longer fit for purpose for how people live and work today, Nottingham Building Society has found.

The society’s latest survey of 500 mortgage brokers found that 83% feel more optimistic about the state of the mortgage market than they did six months ago, despite rising inflation rates and the cost of living.

However, the majority of those surveyed said that current mortgage products have failed to keep pace with the changing financial circumstances of UK borrowers.

More than half (52%) added that lenders have been too slow to respond to evolving customer needs. The Nottingham has stated that while confidence may be returning, the sector is at risk of complacency.

The society’s research also revealed a demand for innovation. Twenty-five percent of brokers stated that product innovation, including mortgage flexible mortgage options catering to non-traditional employment pattern, income types and family structures, must be the number one focus for lenders in the year ahead.

A further 23% of brokers want to see lenders adopt new technologies to streamline the application process, while the same proportion cite better support for vulnerable borrowers as a key area for development.

The Nottingham said its research had highlighted "clear areas of opportunity".

Head of mortgage product and proposition at Nottingham Building Society, Greg Went, commented: "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 Many are telling us that outdated lending criteria risk locking good customers out of the market.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."

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