Paragon eyes a return to lending
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Paragon Group, parent company of Paragon Mortgages, is considering getting back into new lending after posting a pre-tax profit of £54.3m.
Paragon Mortgages stopped accepting new business in February to manage its pipeline. Its parent now says it is encouraged by recent developments in wholesale money markets such as securitisations from Lloyds Banking Group, Nationwide and Barclays.
Nigel Terrington, chief executive of Paragon Group, says: “These are early days but recent improvements in funding markets have encouraged us to look more confidently towards reinstating our funding programme to support new lending.”
But John Heron, managing director of Paragon Mortgages, says the big question is when the lender will return.
He says: “The market is starting to recover and we expect to see that trend continue next year. We can’t put a timeframe on a return as it depends on how the wholesale and structured finance markets develop but we’ll be there when they return.”
Last week Paragon Group repor-ted a pre-tax profit of £54.3m for the year to September 30, while in 2008 it made a similar pre-tax profit of £53.7m.
Arrears of three months or more stood at 1.54% of Paragon’s book compared with the Council of Mortgage Lenders’ industry average of 3.23% for buy-to-let lenders.
Paragon says the number of landlords remortgaging their buy-to-let properties has fallen to its lowest level for more than two years.
Out of 200 advisers it polled 39% applied for buy-to-let remortgage deals for landlord clients in Q3 2009, the lowest proportion since Q1 2007.
