The Intermediary – August 2025 - Flipbook - Page 30
BUY-TO-LET
Opinion
AVMs in buy-to-let:
Scale, speed and
greater flexibility
I
f there’s one thing that is
absolutely certain about the
buy-to-let (BTL) market,
it’s the fact that timing can
absolutely make or break a
deal. Whether it’s locking
in a rate, jumping at an investment
opportunity or meeting ever-tighter
deadlines, brokers are busting a gut
to support landlords and get deals
over the line. In response, lenders are
equipping themselves with tools and
technology to prioritise agility and
efficiency to keep pace.
Automated valuation models
(AVMs) are a fantastic example, and
are helping to transform the buy-tolet market, delivering greater speed,
efficiency and cost savings for lenders,
brokers and their landlord clients.
AVM 101
An AVM is a valuation that combines
mathematical or statistical modelling
with databases of existing properties
and transactions to calculate property
and rental values. They prove most
effective when there are similar
properties nearby that can provide
comparable evidence – for example, a
property on a housing estate or a street
of terraced houses.
For real accuracy, AVMs work best
when recent physical valuations can
feed into the data model.
Where AVMs have proven
less suitable is for those atypical
properties. For example, finding
comparable, local data for a bespoke
house in multiple occupation (HMO)
conversion or a multi-unit freehold
block (MUFB) is not always possible.
Gaps in valuation data can also limit
the ability of an AVM. It’s one of the
reasons why the BTL market was slow
to adopt the technology.
However, as property data has
advanced and market intelligence has
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The Intermediary | August 2025
improved, so has AVM technology and
adoption. Now, the AVM ecosystem is
far more advanced and sophisticated,
meaning it can now draw upon data
such as the number of bedrooms
in a property and whether it has
multiple kitchens.
While it still may not suit every
property, the benefits to portfolio
landlords are hard to ignore. This is
especially true for those looking to
remortgage their entire portfolio.
Prior to automated valuations,
these landlords would need to apply to
have all of these properties revalued
at the same time using individual
physical valuations.
Not only is this at a significant cost,
but it’s hugely time-consuming, with
the landlord needing to be present at
each property and to coordinate with
every single tenant.
At Landbay, we integrated AVMs
around 18 months ago, and the results
so far have been really promising.
Alongside individual examples, we are
finding that landlords are saving, on
average, £500 on valuation fees.
Using the portfolio landlord as
another example, one of our clients
saved nearly £4,000 in fees on their
portfolio. For a landlord with 20
properties under their belt, they could
be looking at savings of £10,000 just by
removing valuation fees.
Given the current market landscape
and the cost pressures facing
landlords, this is a significant saving.
Alongside efficiencies for brokers,
we have found that AVMs speed up the
time to offer and are three-times faster
than a standard application.
In addition to saving £4,000, that
same landlord reached offer stage
within 14 working days. We have seen
other examples where we can issue an
offer within 24 hours of the decision in
principle (DIP).
ROB STANTON
is sales and distribution
director at Landbay
Broker-led tech
In our view, AVMs really succeed
when they are directly integrated
into a broker portal, where they can
deliver efficiencies for brokers by
streamlining the application process.
By choosing an AVM at the outset,
brokers trigger both policy and
product rules that run in real-time.
It will quickly determine if a case is
suitable for an AVM, and if not, it will
automatically switch to an equivalent
standard product without needing to
start again.
Alongside the right platforms, the
products must remain competitive
and alive to the needs of the market.
Just recently, we expanded our
AVM proposition through our Limited
Edition range, increasing both the
maximum loan amount and the
maximum loan-to-value (LTV). Across
all four products, the maximum
LTV has risen from 65%, to 70% and
75% LTV, while the maximum loan
amount has increased by 15% – from
£478,500 to £562,500.
The aim is to unlock AVMs and
make them available to a wider pool
of cases, giving both broker partners
and their landlord clients greater
flexibility and enhanced options,
whether they are set to purchase
or refinance.
AVMs present a fantastic
opportunity for brokers to fast-track
applications without compromising
accuracy or service. Given the tough
demands facing both landlords and
the brokers supporting them, it is a
solution that is well in tune with the
realities of today’s BTL market, where
speed, cost and certainty are all the
upmost priority. ●
