Paragon is set to axe up to a third of its workforce after Mortgage Trust’s new business processing function was transferred from Epsom to Solihul, the buy-to-let lender confirmed this morning.
Paragon says the reduction in new business generation over the period has necessitated a review of the group’s resource requirements and that the group headcount is expected to be some 30% lower than at the beginning of the financial year.
It says: “As a result of current market conditions and the unavailability of warehouse finance at present, funding for new lending is limited and over the period completions, particularly in the buy-to-let businesses, have been managed down in a controlled manner.
“Across the period, total advances will be some 50% less than in H1 2007.”
It added capacity had nevertheless been maintained to resume lending at higher volumes, when it is possible to do so.
Whilst sentiment in the housing market has deteriorated in recent months, the private rented sector remains strong.
Recent data from RICS for Q4 2007 saw continuing high levels of tenant demand and strong rental growth, at more than twice the survey’s long run average, as a consequence, in part, of the generally weaker state of the housing market.
Landlord sales fell from 6.5% to 4.6%, the lowest since Q2 2006.