How AI is being used in underwriting finance

In the UK, artificial intelligence (AI) is changing how finance companies decide who can borrow money. Underwriting used to be slow and manual, with people looking through lots of forms, bank statements, and credit reports.

Now, AI systems can do much of this work quickly and accurately. They analyse information about the borrower, the property, and the loan in seconds, helping lenders make fairer and faster decisions.

Using AI in property finance

In property finance, especially for mortgages and property development loans, AI is used to check if someone can afford the loan. It looks at income, credit history, spending habits, and even market conditions, over manual underwriting.

Some systems use machine learning to spot patterns from thousands of past loans. If people with similar profiles repaid loans successfully, the AI can give a higher score to the new application. This makes the process quicker and often more accurate than a human underwriter working alone.

Using AI for short-term finance

For short-term loans, like consumer loans, speed is important. Traditional checks could take days or weeks, but AI tools can assess risk in minutes.

Many short term lenders such as One Stop or Drafty now use AI-driven credit scoring, which pulls data from multiple sources, including bank feeds and property databases.

The faster approval times mean people can access funds quickly when buying or renovating properties. A 2023 UK Finance report found that 60% of lenders using AI cut decision times by more than half.

Using AI for property valuations

AI is also changing property valuations. Instead of waiting for a surveyor to visit a property, lenders can use automated valuation models (AVMs).

These systems compare the property with similar ones sold nearby, using data from the Land Registry and other sources. Some AI tools even analyse photos and floor plans to spot potential issues. While complex cases still need human checks, AI valuations are now common for standard properties, speeding up the whole process.

Using AI to decide who gets finance

Deciding who gets finance is a mix of risk assessment and compliance. AI helps by checking more than just credit scores. It can look at income patterns, employment history, and even open banking data, which shows real-time spending habits. This gives lenders a clearer picture of someone’s financial health. It also helps spot fraud by noticing unusual patterns in applications.

The future of AI in underwriting

In the UK, regulators are watching AI carefully to make sure decisions stay fair and unbiased. Lenders must explain decisions clearly, even if AI makes them. But the trend is clear: more finance companies are using AI because it saves time, cuts costs, and often makes better lending decisions. As technology improves, AI may become the main tool for underwriting in all areas of finance, from big mortgages to small bridging loans.