MortgageSource has enhanced its search function to search for mortgage products based on the rental income provided. The software will also look at whether the application is a purchase or a remortgage, the client’s capital raising requirements and their tax status.

From 1 January, the Prudential Regulation Authority (PRA) has ruled that all buy-to-let lenders must stress rental income for purchase applicants by a minimum of 5.5% and take into account all aspects of running an rental home when assessing affordability. This stipulation has seen most lenders increase their calculations from 125% to 140-145% of rent received. Lenders do not have to subject remortgage borrowers, who are not raising capital, to the same levels of stress-testing.

Phil Bailey, strategy director of Twenty7Tec, said: “The PRA is clearly looking to flex its muscles with these changes. Tougher guidelines for affordability and stress-testing is throwing yet more regulation towards the buy-to-let market and technology providers need to adapt quickly to support intermediaries.”

He added:“Having now seen the amendments to product ranges from lenders in December relating to the PRA, Twenty7Tec has finalised the enhancements needed to best support intermediaries sourcing for buy-to-let mortgages.”