UK residential mortgage lenders are entering 2026 facing sustained economic pressure, but with growing confidence that technology, automation and AI can unlock faster, more efficient property transactions. New market research from Landmark Information Group highlights a clear shift in lender priorities.
While regulation remains a consideration, operational inefficiency has overtaken it as the sector’s most pressing challenge, pushing lenders to accelerate investment in AI, data interoperability and workflow automation.
The research shows that economic conditions continue to weigh heavily on decision-making. Almost nine in ten lenders (88%) identify the wider economic climate, interest rates and cost-of-living pressures as major or moderate concerns.
Yet despite this backdrop, optimism persists, driven by growing belief that digital transformation can deliver measurable improvements across the mortgage process.
From regulatory burden to operational bottlenecks
In 2025, lenders reported spending almost half of their working day, 45%, chasing updates from other stakeholders or responding to information requests, up sharply from 32% the year before.
As a result, long transaction times have become the single biggest source of frustration for 40% of lenders, overtaking regulatory and administrative pressures that dominated concerns in 2024.
This inefficiency is increasingly seen as a systemic issue rather than a firm-by-firm problem, rooted in fragmented data, manual processes and inconsistent information sharing across the property transaction chain.
AI adoption accelerates across mortgage operations
Technology is now firmly positioned as a core lever for change. Nearly half of lenders surveyed (48%) say they are prioritising investment in AI to automate routine tasks and streamline workflows. When asked which factors would most improve productivity and business performance, 45% pointed directly to the effective use of AI.
Confidence in AI has shifted rapidly. In 2024, more than four in ten lenders believed AI would have little impact on their work over the next five years. By 2025, that view had almost disappeared, with just 3% still holding that position.
Today, three-quarters of lenders believe AI will enhance customer engagement, while more than two-thirds expect it to significantly improve data analysis and decision-making.
Data interoperability seen as critical to faster transactions
Alongside AI, access to reliable, connected property data has emerged as a near-universal priority. Almost all lenders (98%) agree that a secure, interoperable data repository would help eliminate inefficiencies and reduce transaction times across the mortgage and conveyancing process.
However, challenges remain. Legacy systems, limited IT budgets and capacity constraints were cited by 63% of lenders as barriers to progress. Data quality and completeness remain a concern for 55%, while almost half raised issues around security, privacy and regulatory compliance.
Despite these obstacles, there is strong alignment around the need for industry-wide solutions rather than incremental fixes.
Industry collaboration targets structural reform
This push for systemic change extends beyond lenders alone. Landmark Information Group’s cross-sector initiative, Project 28: A Charter for Faster, More Certain Property Transactions, brings together lenders, agents and conveyancers with the shared goal of reducing the average time from sale agreed to exchange to 28 days, compared with a current average of around 120 days.
Consumer research suggests there is appetite for this change, with many buyers and sellers willing to pay an upfront fee in exchange for faster, more reliable data sharing and reduced uncertainty.
Sustainability and climate risk embedded in lending decisions
Sustainability has also become fully embedded within lender operations. Almost all lenders (98%) now say sustainability is important to their organisation, with policies in place and actively followed, a significant rise from 74% just a year earlier.
Climate-related risks dominate property-level concerns, with 45% of lenders citing climate change and flood risk, followed by coastal erosion (43%) and local planning issues (40%).
“What we are seeing in the latest lender research is a clear shift in focus. Regulation has not disappeared as a concern, but it is no longer dominating priorities. Instead, lenders are focused on addressing the practical inefficiencies that slow transactions and drain productivity.
“Lenders are increasingly turning to digitisation, automation and AI to manage these pressures. While progress in sustainability and risk management remains vital, the overwhelming consensus on data sharing reinforces the need for a systemic fix.
“This is where Project 28 becomes essential, moving beyond individual tools to fix the process as a whole and finally deliver the speed and certainty the market requires.”
Mike Holden, Divisional Director of Growth, Landmark Information Group
