Paragon poised to return as B2L prospects pick up

24 May 2010

Brokers are becoming more optimistic about the buy-to-let sector as product numbers increase and Paragon Group has signalled its intention to re-enter the market. Figures from Moneyfacts. co.uk show that the number of buy-to-let mortgages has grown 70% since the market’s lowest point in September 2009, with the number of products going from 179 to 304.

Products up to 80% LTV now account for 4.24% of all buy-tolet deals, compared with the 1.4% they represented in September. Between September and May the average two-year fixed rate deal has gone from 5.96% to 5.66%, while the average two-year tracker has gone from 4.59% to 4.49%.

Brokers are keenly awaiting the return of Paragon Group to the sector. It posted a pre-tax profit of £29.3m for the six months to March 31.

Profits were up 84.3% from the same time last year when it saw profits of £15.9m. New lending at Paragon has been restricted to existing borrowers since February 2009. John Heron, director of mortgages at Paragon, says: “Conditions in the wholesale funding markets continue to improve and discussions are progressing with a number of parties to determine if suitable financing arrangements can be agreed to support new
lending.”