60 Seconds With... John Heron

3 August 2009 | By Robyn Hall

Paragon Group recently launched a residential landlord insurance division - Redbrick Landlords Insurance. What’s the thinking behind this?

The Redbrick brand covers a broad range of insurance and property services to our landlords as well as those in the wider market.

54% of mortgage brokers think buy-to-let should be regulated by the Financial Services Authority. What do you think?

Should the Financial Services Authority be seeking to stop some investors from putting themselves in harm’s way by purchasing buy-to-let property? If so, that would be an extension of its remit. The bulk of property in the buy-to-let market is owned by large-scale professional landlords and there’s no question that these transactions are commercial in nature. Should we be looking to extend consumer-style regulation into the commercial sector?

What more can be done to target fraud in the buy-to-let sector?

The majority of fraud that has been seen in buy-to-let has come from so-called property investment clubs. We have seen little fraud and put this down to three factors - we refused to work with investment clubs, we always looked to underwrite the ability of individuals to operate as landlords as well as their ability to pay and we employ our own team of surveyors.

The recent Foxtons case in the High Court highlighted that fees charged to landlords by letting agents are unfair. do you agree?

My sympathies lie with landlords. In the rest of the country one-off fees for introducing tenants are the norm so why should it not be the case in London which is by far the largest lettings market in the country?

What do you make of the Conservative proposal that the Bank of England should regulate lenders?

Attacking the tripartite structure of regulation is in vogue but rather than simply shift responsibility to the Bank of England I’d like to hear what the Tories would do to support the ambitions of average home buyers and landlords.

When do you expect lending to increase?

Recovery in the wholesale markets, including structured finance, is inevitable and essential. I’ve heard some bankers who understand these matters say we should see some movement before the end of 2010. I’d like to see a faster recovery but I’d be happy with that.

Interview by Robyn Hall