Guest blog: The Changing Conditions of the Mortgage and Housing Market and the Advantages of Adopting Digital Strategies

Guest blog by Daniel Broadhurst, Regional Vice President, nCino.

nCino is a headline sponsor of the Building Societies Annual Conference

Guest blog by Daniel Broadhurst, Regional Vice President, nCino.

Many industries have worked tirelessly to combat changing market conditions caused by COVID-19, and the UK mortgage sector is no exception. Large and small lenders alike have been forced to adopt changes to their lending criteria and product set in order to match market demand, fuelled by government incentives and changing work from home behaviours. While many lenders have adopted digital automation and improvements such as online application tracking and instant messaging, the innovations in the mortgage space must go beyond modular, point solutions if institutions wish to differentiate themselves in a post-COVID world.

Home Lending Market Conditions

Home sales in the UK have been skyrocketing, as data from Twenty7tec reveals the volume of standard residential mortgage searches in March 2021 grew 27 per cent from February. Shockingly high volumes of home loans are the result of a number of factors, including continued government support with the Stamp Duty Holiday and mortgage guarantee scheme, as well as growing consumer confidence in the market. The Stamp Duty Holiday attracted many buyers to the market, as applications increased 93 per cent year-on-year during 2020 and continue to grow 85 per cent in 2021.[1] In addition to the Stamp Duty Holiday, the new government-backed mortgage scheme will help first-time buyers or current homeowners secure a home with just a five per cent deposit for a home up to £600,000.

Elevated levels of home sales are likely to continue in the coming months due to high consumer confidence, motivated by the vaccine rollout as well as changing preferences for remote work accommodations. Consumers have largely migrated to rural areas, seeking larger properties and more outdoor space alongside stay-at-home orders. As a result, more homes were delivered in 2020 than in any year since 1987, and this trend is expected to continue. [2]  In its latest survey of credit conditions, the Bank of England stated that lenders expect the availability of secured credit, as well as borrower demand for it, to increase until the end of May.[3]

The Race for Mortgages

To win members in this hot market, lenders have responded by offering more competitive rates and more digitally enabled processes. For example, one building society recently launched a two-year discount mortgage with an interest rate of less than one per cent, representing lenders’ willingness to slash rates in order to win members.[4] This is consistent with customer preferences, as 99 per cent of respondents in a global mortgage survey identified competitive interest rates as an essential factor in applying for a mortgage, followed by competitive arrangement fees.[5]

Apart from price, the largest opportunity area for lenders is to replace legacy offerings that result in slow loan cycles, dissatisfied members and colleagues and high operating costs. 2020 was a massive wake up call to institutions to digitise, but apart from online tools that solve short-term problems like mobile applications, organisations must build on this momentum in order to not only meet but exceed market and member expectations.

A Unified Lending Experience Enabled By Automation, Integrations and Partner Connectivity

COVID-19 has highlighted operational pinch points in the mortgage process that have existed for years, including legacy architecture and misaligned operating models. To solve for these challenges, there are four key areas building societies should evaluate when improving their existing operations:

Lending Automation

By automating the lending process from agreement and decision in principle through underwriting and closing, FIs can deliver an integrated experience that delivers quicker communication and faster funding.

Partner Portals

The surge in home buying has caused a strain on third parties, including brokers and conveyancers. Given the disparity between demand for and supply of housing, the intermediary and lending sectors both forecast growth, and players can seamlessly bridge the gap between third parties can eliminate duplicate data entry and enhance collaboration, ultimately shortening the origination process.


Rather than being all things to all people, institutions must leverage integration partnerships and connections to trusted data sources such as e-Signature, credit services sourcing providers and more to streamline and enhance the mortgage experience.

Single Platform

Beyond faster decisions, a single digital mortgage solution improves back-office efficiency for lenders while simultaneously crafting a seamless homebuying experience for buyers rather than a risk-based credit process.

While the end to the Stamp Duty Holiday may temper activity levels for a short time, widespread market disruption or dramatic home price decreases seem unlikely.[6] The pandemic has prompted lenders to embrace digital solutions that solve for near-term challenges brought on by remote work, but institutions must assess how digital solutions can contribute to long term benefits. With a single, end-to-end proposition that leverages partner connectivity and integrations, lenders will be able to increase overall conversion rates, reduce time-to-offer and gain operational efficiencies to not only weather the pandemic, but gain competitive advantage well into the future.

nCino is a headline sponsor of the Building Societies Annual Conference. To find out more, visit www.ncino.com