Close Mortgages will allow clients to access the service on properties up to 75 per cent loan-to-value (LTV) if they have owned the property for at least six months.
Bob Golden, chairman of Close Mortgages and Mortgage Intelligence, through which Close Mortgages exclusively lends, believed it had mitigated the risks of using AVMs technology in the BTL market.
He explained: “Lenders have not provided AVMs on BTL products as there is a problem with calculating rental income from the property. Hometrack is developing such a system, but it’s not here yet.
We think lending on less than 75 per cent LTV, as long as the client has a shorthold tenancy agreement in place, will guarantee the rental income is assured and we will do the deal.”
Close has said it will not charge any extra for the use of AVM technology.
Golden believed Close would be the first of many lenders offering AVM remortgages on BTL, with competition helping to extend the lending criteria.
“With the benefit of learning, competitive pressures will drive lending criteria. But you have to think about responsible lending and be confident in the technology.”
Jon Burridge, managing director at Quantum Mortgage Brokers, said: “The issues would be if a significant number of cases go straight through and if the valuations will stand up further down the line.”
