Over the next decade, many borrowers will find making a mortgage application is as simple as buying car insurance, as the housing sector undergoes a technological revolution, according to a fintech expert.
Pete Mugleston, of Online Mortgage Advisor, believes that the improvements to finance-based technological processes will soon mean that most borrowers will be able to find mortgages to suit their needs with ease.
Up until 2012, most borrowers applied directly to a bank or a building society, but by 2014 more than 60% of mortgage loans were arranged through brokers. If the way forward is a simplified mortgage application process, not only will consumer borrowing feel the impact, mortgage brokers could face dramatic implications too.
Mugleston claims: “We are on the verge of some real breakthroughs with APIs [application programming interfaces] and automation, and I can see, in another ten years, the mortgage application being as simple as car insurance for many borrowers.”
Lenders leading the way
Online broker Habito has seen exponential growth rates since 2016 as it set about transforming the mortgage experience for borrowers and last year announced a move into the lending market. At the end of 2019 it launched the ground-breaking residential product, Habito Go; a service that gives would-be homeowners the chance to boost their bid and upgrade their mortgage to a cash offer upfront, giving buyers huge speed and certainty advantages and greater price negotiating power with sellers.
Late last year, Natwest struck a deal with real estate blockchain network start-up Coadjute to create a fully app-based process for buying and selling houses using blockchain technology.
HSBC has also invested heavily to reduce its mortgage application process from 50 days to just one week. Chris Pearson, head of intermediary mortgages at HSBC, says: “We have improved customer service and the customer journey while utilising technological advancements and significantly reducing our time to offer, which is pretty phenomenal.”
Mojo Mortgages launched a ‘white label’ plug-in for third parties (it partners with UK online estate agents and proptech firms) and has processed £140 million in home loan referrals in just one year.
Richard Hayes, co-founder and CEO, says: “We’re on a mission to create a better mortgage experience for everyone, which is why we launched our strategic partnerships platform last year.”
“Since then, the platform has won an industry-leading award, and we have helped thousands of customers get a mortgage, or remortgage through it.”
Proptech pioneering change
The proptech market is a fast-growing sector with several new UK companies focused on making what can be a stressful mortgage applications process into a much easier one.
Research by R&D tax credit specialist RIFT Research and Development Ltd found that the UK property sector is leading the way when it comes to the largest sums awarded in R&D tax relief as a percentage of expenditure.
Sarah Collins, director of RIFT Research and Development Limited, said: “The latest data demonstrates that when it comes to the sector making the most of R&D tax relief, the property sector really is leading the way…this comes as no surprise with the explosion of the proptech sector radically changing the way we operate within the property space, whether it be as a consumer or as a working professional.
“As a result, there has been some huge advancements in recent years with a vast number of companies pioneering change across the board from the way we apply for a mortgage, to the way we list and sell our homes, even within additional services such as moving home…”