By Mark Blackwell, lending and surveying services director at eTech Solutions
This article was originally published on the Mortgage Solutions website 04.12.17
Since the Prudential Regulation Authority (PRA) rules on buy to let (BTL) lending came into force on 30 September, we’ve been watching with interest to see how brokers, lenders and landlords have coped with the new legislative landscape.
The requirement for portfolio landlords (those with four or more mortgaged buy-to-let properties) to submit their entire portfolio for scrutiny when applying for a new mortgage has created both challenges and opportunities.
Technology has undoubtedly helped to lighten the additional burden of compliance imposed, but it’s important for those involved to balance digital solutions with an ongoing human touch.
When first looking to technology to automate processes previously carried out manually, there are several key questions to be answered, and in the case of buy-to-let, common key requirements have emerged.
Automatic upload of spreadsheets in multiple file formats and data cloning for duplicate portfolio submissions to different lenders can greatly simplify portfolio management.
Automatic address verification can provide an additional layer of efficiency, and the ability to reuse or amend data in real time can save valuable resources.
We are in a world where properties once considered background properties are now under the spotlight, requiring the landlord to produce much more data.
Robust lending decisions
Solutions facilitating this are simplifying a complex situation and ultimately resulting in quicker and more robust lending decisions.
Configurable rules around automated valuation models (AVMs) are also streamlining processes; lenders need to demonstrate how they are applying rules and AVM data is one such means of doing so.
It’s clear that digital solutions can create considerable efficiency savings, but stakeholders must choose how best to capitalise on this additional capacity created.
Through our ongoing work with various BTL stakeholders, we know that clients investing in online solutions while maintaining a personal approach reap considerable benefits and it’s clear that a human element to provide advice and reassurance remains key to a successful mortgage transaction.
Skilled professionals required
While technology provides lenders with the tools to deliver quicker, safer and more defensible lending decisions, there are too many variables involved now in BTL to leave it all to an algorithm, and the ongoing participation of real-life, skilled professionals remains essential.
Business development managers have shown real value in communicating how lenders are implementing technology, and we’ve worked with several recently to see how vital this role is in communicating information to support the mortgage transaction.
The combination of technology and human intervention is a powerful one and we are witnessing the harnessing of both elements.
We’re confident that for stakeholders who are blending technology with the ongoing involvement of their people, it’s businesses as usual at the start of this new property underwriting era.
Turning challenge into opportunity is second nature for those keen to innovate, and there’s real appetite to develop existing tools to foster even greater relationships between broker, landlord and lender.
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