Paragon notices positive turn in buy to let

Landlord Expert
By Landlord Expert May 26, 2011 12:14

First-time buyers are being squeezed out of the housing market and forced to rent for longer, pushing rents to their highest level in years.

As a result Paragon's customers, the UK's landlords, are better able to pay back their mortgages. Despite the gloomy economic environment, Paragon actually saw a 50pc decline in bad debts. Nigel Terrington, chief executive, said the company was benefiting from a climate of rising mortgage rates, which makes its mortgages seem more competitive.

He expects the housing market to remain flat this year and next. "You've still got the effects of the credit crunch unwinding. The economic environment will be softish over this period. We're not in the territory of double dips, it's just likely to be a bit dull."

Paragon stopped new lending in 2008 when the securitisation markets dried up, but reopened for new business last September. The company aims to issue up to £250m in bonds backed by its loans this summer.

Paragon said pre-tax profits rose to £34m in the six months to March. The company will pay an interim dividend of 1.35p on July 29, up 12.5pc from the same period last year.  

Landlord Expert
By Landlord Expert May 26, 2011 12:14

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