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Lender innovation - what next?

ended 25. September 2025

98% of adults living with their parents (ALPs) cannot afford to buy the average first-time buyer home in their area based on their own income, according to new research by the Skipton Group, created in partnership with Oxford Economics. While we have had lots of innovation in 2025 to date, with lenders doing their best to boost affordability, one broker on Newspage has said more innovation still may be needed. He suggested interest-only products for an initial period within affordability and products that allow, for example, subletting. He added: “A buy-to-let-to-move-in-later-type product may be the last bastion to kick start the market and allow people to buy a first home.” Have you got any ideas for ways lenders could innovate above and beyond what they themselves have created this year? Also, do you think lenders tap into broker intel enough when building products?

5 responses from the Newspage community

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Omer Mehmet
Managing Director at Trinity Finance
Lender ‘innovation’ has too often been smoke and mirrors — tweaks on criteria rather than true creativity. If we want to crack the affordability crisis, we need bold ideas like phased interest-only, shared equity with private investors, or flexible products that allow short-term subletting. Brokers see the roadblocks every day, yet their intel is rarely used to design solutions. Until lenders bring advisers into the room, innovation will stay incremental when the market needs something transformational.
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Rob Mansfield
Independent Financial Advisor at Rootes Wealth Management
As Star Trek's Scotty once quipped, you cannot change the laws of physics. Innovation would be welcome but the wider picture is whether this is solving the problem, or making it worse. The fundamentals are that there isn't enough housing supply to meet the demand. Property prices then rise to balance out the equation. The result is the unaffordable market we see today. Innovation stimulates demand but does nothing for supply. The risks here could be the next generation of mortgage prisoner or a greater risk of negative equity.
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Peter Dockar
Chief Commercial Officer at Gen H (Generation Home)
This is exactly the right question to be asking. People can’t afford to buy homes – so how can lenders innovate to make it possible? Gen H plans to launch two new propositions this year – one coming next week! – designed to unlock homeownership for people today, all with no material change to their financial circumstances… But my next question, then, is: are mortgage brokers ready to advise on new products, or on familiar products designed to be used in new ways?
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Ranald Mitchell
Director at bad credit mortgage specialists Charwin Mortgages
Lenders could revisit the idea of mixing secured and unsecured borrowing, but in a safer way than the Northern Rock era. A 100% mortgage doesn’t have to mean reckless lending. Imagine 90% secured over 25–35 years, with the final 10% structured as an unsecured top-up cleared over, say, 10 years. This could give first-time buyers a way onto the ladder without exposing lenders to excessive long-term risk. It bridges both the affordability and deposit gap while building repayment discipline. Structured responsibly, it could be one of the most effective innovations for people living with parents, who are currently locked out of ownership. What’s missing is lenders working more closely with brokers, who see these challenges daily. If broker intel shaped product design more directly, we’d see sharper, more usable solutions for the people struggling most.
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David Stirling
Independent Financial Adviser at Mint Wealth
Something has to give to avoid a generation living at home with their parents and to help young people get on the property ladder. A big factor in all this is the lack of housing stock, however more lenders should be looking to innovate and asking the brokers at the coal face with clients every day what's needed. Some of the building societies are thinking outside the box, for instance Skipton's Track Record mortgage, which can offer borrowers up to 100% lending. All too often though the bigger lenders policies are led by risk teams, the regulators and capital providers than broker feedback.