High street lenders have reduced the average application processing time by 30%, from 14 days in 2022 to 10 days in 2024, finova has found.

The firm’s 2024 mortgage efficiency survey revealed that in this time, larger lenders processed applications in 11 days on average, while smaller regional lenders have cut their time from 23 to 19 days in the last year.

finova added that "unsurprisingly", challengers and specialist banks continue to face longer processing times, averaging 28 days due to their focus on more complex lending cases.

The firm stated that these gains show how lenders are harnessing technology to deliver a faster service to borrowers, responding to challenges exposed by the mini Budget.

Despite the positive improvements in processing efficiency, finova said that the findings "underscore the headwinds facing the buy-to-let (BTL) sector", with BTL lending across all lenders falling back to 26%, down by 3% from 2023.

The firm has pointed towards rising rates and an evolving regulatory environment as the reason for this.

Business development director at finova, Steve Carruthers, said: "The mortgage market has historically been slower to innovate than other sectors, making it all the more exciting that lenders are finally embracing new tech and unlocking its potential.

"The mini Budget exposed inefficiencies that have long plagued the industry and it's encouraging that lenders are now turning to tech to streamline processes and improve outcomes for borrowers."

Of the 43 lenders surveyed, 91% of mortgage applications were sourced through intermediaries in 2024, a marginal increase from 90% in the previous year.

The firm said this reinforces the "critical role" brokers play in supporting borrowers to find the right product to suit their financial needs, and driving applications for lenders.

Technology is also a key driver of success for lenders, with three quarters (75%) rating their satisfaction with automation in the mortgage process between three and four out of five.

Looking to the future, over three in five (61%) lenders reported that their product launch processes have improved since the mini-Budget in 2022, with many attributing this to operational changes such as streamlining approvals and investing in new technologies.
Meanwhile, over half (56%) also believed they had made improvements in product criteria and policy changes.

However, larger societies and smaller regional lenders believe that they have fallen behind.

Carruthers concluded: "High street lenders, with their greater resources, are leading the charge, but what’s really impressive is how smaller regional players are also making significant gains in cutting processing times.

"Technology must be harnessed as a co-pilot – not a replacement for humans – and our hope is that the developments highlighted in our report signal the beginning of an era where innovation drives real change for borrowers across the board."

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