Paragon opens books for more buy to let mortgagesMake Text Bigger
Buy to let lender Paragon is jumping back into the landlord mortgage market to fill the hole left by Lloyds Banking Group tightening up borrowing terms.
Landlords can expect to see more jockeying for position in the market with new products and lenders coming to the fore as Lloyds have left a massive whole in the sector.
The two big buy to let lenders held 80% of the market until last Friday, with Lloyds Banking Group out in front with 60% followed by The Mortgage Works – a subsidiary of Nationwide – with 20%.
Lloyds are now shrinking their share of the market by restricting new loans to customers with no more than three buy to lets mortgaged to the entire Lloyds group with mortgage balances capped at £2 million in total.
Paragon, a former market leader before the credit crunch, has murmured about returning to the market for sometime.
Now, the lender wants to grab a sizeable share of the market targeting professional landlords with larger portfolios.
The number of available buy to let products has fallen from about 3,600 in July 2007 to around 280 today. Many are focused on novice or small-scale landlords.
Australian-based Macquarie Bank is providing the £200 million warehouse facility to fund Paragon’s mortgage lending.
Paragon chief executive Nigel Terrington said: “Professional landlords with more complex buy to let requirements, such as houses in multiple occupation (HMO’s) or multi-unit blocks, have been particularly underserved and we will specifically target this market segment.
“Supply of private rented sector property is already under severe strain, which is leading to rental inflation. It will be professional landlords who stimulate the growth of the sector and we want to be there to help them achieve this.”
Paragon’s products include fixed and tracker buy to let mortgages at 65% and 75% loan-to-value with fees of 2-2.25%.
Mortgages are available for HMO’s, multi-blocks and limited companies.
Paragon closed lending books in February 2008 due to funds for lending drying up.
“Competition in the mortgage market has been sorely lacking over the last couple of years. Nowhere is this more evident than in the private rented sector where tenant demand is strong and expected to grow. Competition is vital for a healthy and vibrant buy to let market and we aim to provide that competition.” said Mr Terrington.
For further information please call our Customer Care Team on 01603 894525.
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