Fintechs are entering the mortgage lending space and it's good for homebuyers – He

Housing finance is beginning to evolve too, as technology and new partnerships reshape how borrowers access mortgages.

Homeownership remains out of reach for many. The HomeOwners Alliance reports that 1.9 million aspiring buyers do not believe they will ever own a home.

Mortgage lending remains the main route to homeownership, rising around 4% to £300bn in the past year, yet deposit barriers and rigid affordability tests still exclude many creditworthy borrowers.

Mortgage underwriting is rightly thorough, but it can rely on limited data. Technology can strengthen affordability assessments by improving the quality of information used.

Open banking gives lenders a clearer view of income stability and spending patterns, helping them assess applicants more accurately while maintaining strong risk discipline.

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A new approach to lending

Fintech lenders are not replacing traditional institutions but are working alongside banks and mortgage advisers to improve access where borrowers are sound but poorly served by legacy models.

This approach is already reshaping consumer lending, where artificial intelligence (AI) and open banking data provide deeper insight than credit scores alone. Abound demonstrates this in practice, using open banking transaction data to build a fuller picture of customers’ financial health, supporting borrowers who are new to the UK, have irregular income, or lack long credit histories and allowing them to be assessed fairly.

Used responsibly and alongside broker advice, open banking can widen access to credit without lowering standards, supporting more sustainable lending decisions, including in mortgages.

Acquisitions of newer players are helping fintech lenders enter the mortgage space, with activity involving firms such as Ahauz, Habito and Acre reflecting this broader trend. Partnerships are playing an important role as well. As Help to Buy has ended, collaborations between banks, fintech lenders and housebuilders are emerging to address deposit constraints and more complex borrowing needs.

Time will tell, but the direction is clear: new approaches are already improving clarity, speed and access for borrowers while supporting sustainable lending.