Published 8th July 2019
The government has estimated that there are more than 10,000 rogue landlords operating nationwide, many of whom own England’s 500,000 houses in multiple occupation (HMOs).
However, there is no single, UK-wide government database of rogue landlords. Similarly, there is no single database of all UK HMO properties being vetted and managed for licensing law compliance and tenant protection.
There are a multitude of ways that a mortgaged residential property can be let illegally. Some landlords breach the terms of their standard owner-occupier mortgage contract by letting the property out without lender approval. Perhaps more seriously, even where a BTL mortgage is correctly in place with the lender, it can be in breach of regulations and minimum standards. Both of these scenarios can carry significant risk for the lender.
Below are three ways GetRentr can help mortgage lenders:
Price mortgages accurately
Licensing affects property value. A BTL mortgaged property without the requisite licence approved for rental can expose a lender to debt service risks such as void periods and mandated improvement works to a property, not to mention fines and prosecution of mortgagees.
There are three types of Property Licence schemes: Mandatory, Selective and Additional. The geographic reach and scope of conditions vary by scheme type, location and occupancy configuration of an individual property. Mandatory Licensing is nationwide but Selective and Additional vary depending on the council or borough where the property is located, and are complex and dynamic. GetRentr is the one unique platform to clearly inform licensing status of every property UK wide in an instant.
The GetRentr platform allows mortgage lenders to gain instant licensing and Article 4 determinations for origination or remortgages. This accurate data can be incorporated into the underwriting, so risk is based on data and not assumptions. The user friendly nature of the GetRentr platform makes it easy for underwriters and other mortgage professionals to start using the data immediately, with no training required and no switch on fee.
GetRentr provides lenders with an accurate, up-to-date view of the back-book, so lenders can see the application of licenses for properties and rectify these against their data. Thus allowing lenders to review if mortgagees have the correct mortgage products associated with their property and an opportunity to reassess mortgage risk, as well as offer new products to their customer base.
Lend Confidently In New Areas of the PRS
The potential for council intervention in BTL properties carries with it significant risk for mortgage lenders. Fines, as well as mandated property improvement works with extended void periods, can all have a huge impact on a mortgagee’s cashflow, potentially impairing debt service. Due to the divergent regulatory nature of property licensing, as a result of the devolution of powers to individual councils, it has been nigh on impossible to quantify this risk to individual address level at scale, leading many lenders to shy away from HMOs or even the entire BTL market.
With GetRentr, lenders can much better understand the collateral that they are lending against, and offer mortgages in new areas of the BTL market such as HMOs. The ability to understand the risk associated with individual properties rather than just the sector as an aggregate allows lenders to move into potentially lucrative new niches in the PRS.
How to get started
With GetRentr, lenders can access and leverage this intelligence simply, instantly, and at scale. Either directly through our cloud based platform, or via an API, GetRentr allows mortgage lenders to analyse detailed licensing and Article 4 planning requirements on their back books, and on new origination’s and remortgages.
The availability of this information not only enhances the understanding or risk, informing lending suitability and pricing, but also has a tangible operational impact by reducing the administrative burden. One GetRentr client has measured this as reducing their mortgage approval process by 4.2 days per BTL mortgage application, reducing costs but also significantly improving their Net Promoter Score with brokers.
At Kamma we care about cutting through the noise and giving you the latest news and updates on property licensing. Each month, we give you a full rundown of the latest scheme announcements and property licensing news in the Kamma Property Licensing Update. This month we will be looking ahead at some of the challenges […]Read article
Why agents need to prepare now. The UK residential property sector contributes to 22% of all UK emissions. With COP26 just a few weeks away, there is a huge amount in the legislative pipeline designed to tackle this problem. Earlier this year the government passed the first reading of the Minimum Energy Efficiency of Buildings […]Read article
NRLA turn to technological solution to the challenge of increasing landlord legislation, variable local laws, and rising enforcement Partnership means all member landlords will be able to access live licensing updates New arrangements will ensure NRLA members benefit from an enhanced advice line service powered by real time property data October 04, 2021 – The […]Read article
Licensing enforcement has been on the agenda for many councils around the UK this year, with no signs of slowing down. With Michael Gove replacing Robert Jenrick as Housing Minister this month it remains to be seen whether this trend will continue. Looking back at the last month, we have not only seen landlords and […]Read article
Book a demo or get in touch
If you'd like to see the power of the Kamma platform in action, you can book a demo with us by simply clicking on the Book a Demo link at the top of the page.
Otherwise, you can get in touch with us using the form below and we will get back to you as soon as we can.
Sorry, but something went wrong. Please let us know and we'll do our best to fix it.
Thanks for sending us your message. You'll be hearing from us shortly.