Having been in development for over three years, the model replicates Hometrack’s existing model and had been designed to improve efficiency within the BTL market.
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David Catt, commercial director at Hometrack, believed the BTL AVM would revolutionise the market. He said: “The AVM will not be a solution for every BTL deal, but should serve about 55-65 per cent of the market. The sourced data includes over 13 million surveyors’ valuations, one million rental records and over nine million properties. The system is not a yield indicator and is unique to each property.”
Catt added that he expected the system to improve cost benefits and the time spent in
However, Andy Young, chief executive at TBMC, was unsure of its market impact. He said: “The launch of a new BTL AVM is unlikely to have a significant impact on the BTL market. Firstly from a lenders’ perspective, although AVMs may work for lower loan-to-value (LTV) BTL mortgages, the higher risk associated with higher LTVs, where expected rental income becomes more critical, means that the traditional valuation is likely to remain.
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Some lenders have stated that they will not be offering BTL AVMs at all.
“Secondly, most BTL landlords will also want a ‘proper’ rental assessment carried out on their BTL investment properties to be confident that the expected rental income covers the monthly mortgage repayments.”
