Using technology to streamline the Buy-to-Let journey

Rise of technology 

Digital innovation and increased technological enhancements are continuing to positively change the way the buy-to-let (BTL) market operates. As much as new technology brings business benefits, the primary focus should remain centred on improving the landlord and broker’s journey. Tech is not being introduced to replace roles, but instead to enhance service offerings and provide brokers with leading tools to drive business levels and support more deals, in a shorter timeframe.

Automated Valuation Models 

Introducing Automated Valuation Models (AVMs) is a good example of how tech is enabling positive changes. AVMs pull data from integrated third parties, such as Land Registry and sales data, to provide a valuation and confidence rating within a defined risk appetite. Because these valuations are based on data, the subjectivity of a physical valuation is removed. In Shawbrook’s case, roughly 80% of AVMs come back with a better valuation compared to a physical valuation.  

AVMs can also provide estimates on rental yield, which is key for buy-to-let deals. They also work well in the buy-to-let space due to the relatively simple nature of the asset, in comparison to the commercial space which requires physical valuation and more human interaction.

Adopting new technology 

The rise of Artificial Intelligence (AI) is likely to become a factor in digital offerings, but to enhance digital features rather than replace them. For instance, it is a lot harder to implement AI into underwriting as some aspects still require human expertise. It’s most likely that we’re going to see AI utilised more to speed up processes and pull data, such as automatically filling in criteria and knowledge searching to contribute to AVMs and other documentation throughout any deal process.

Whilst technology is improving efficiency and streamlining the user journey, it is also benefitting professionals. It will enable brokers and lenders, for instance, to focus their resource on more complex deals, which require increased focus, as well as expertise and human interaction. 

Though banking as a sector can traditionally be slow to adopt technology, many lenders are increasingly incorporating it into their processes to improve consumer journeys. Shawbrook has continued to innovate the MyShawbook portal, which provides a quicker and more intuitive application journey, by streamlining the process and reducing documentation. The portal is able to provide instant AVMs on buy-to-let cases, as well as immediate indicative mortgage offers. 

Example of success 

The portal has supported cases such as the successful refinance for a portfolio landlord, by orchestrating the refinance of their extensive portfolio comprising of 11 single dwelling houses. 

The refinance included a capital raise of £150,000, allowing the professional landlord to redeem an existing variable rate facility before transitioning to a five-year fixed term buy-to-let mortgage with Shawbrook at 75% LTV. 

Shawbrook were able to deliver the funding at speed as the broker submitted the application via MyShawbrook. An instant Indicative Mortgage Offer (IMO) with an AVM was issued the same day, followed by the Full Mortgage Offer (FMO) 6 working days later. This technology-driven approach has proven pivotal in achieving swift and informed decisions, which resulted in the case completing and the funds being released within 16 days working days from initial application.  This is a prime example of how the customer journey can be streamlined and enhanced, and how lenders are working to tweak digital offerings to improve user experience. 

Technology is here to stay within the industry and has changed the face of how buy-to-let deals are conducted. Ultimately, technology has enabled a fast, simple and cost-effective journey to users, which produces the required outcome in a quicker time. Though many processes are automated, there is still a balance between digital and human interaction, with brokers there to support customers at every stage, and provide clients with additional support throughout the process.