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Paragon staff down by 30%

Paragon Group last week confirmed that it has reduced its staff by a third.

This follows the transfer of new business processing from its intermediary-focussed buy-to-let arm Mortgage Trust from Epsom to Solihull.

The news comes despite Paragon’s buy-to-let index showing that the private rented sector remains strong, with average rents peaking at £11,886 in February, up from £11,604 in January.

Paragon says a drop in new business generation prompted a review of its resources and has forced it to streamline its 650-strong workforce.

Some 62 members of staff were let go in November 2007. A further 93 went into consultation at the beginning of March. Some staff who left of their own accord have not been replaced.

The lender expects its half-year results will show that staffing levels are 30% lower than they were at the beginning of its financial year last October.

In a statement the lender says: “Across the period, total advances will be about 50% less than in the first half of 2007.”

But it adds that Paragon has maintained its capacity so that it can resume lending at higher volumes when it is possible to do so.

Paragon’s buy-to-let index shows rents have risen by 2.4% since last month and 5.2% over the past quarter, while yields stand at 6.3% compared with 6% three months ago.

John Heron, managing director of Paragon, says: “Large scale landlords dominate buy-to-let. There’s no evidence that this class of investor is spooked by the liquidity crisis or by the uncertain outlook for house prices.”

David Austin, managing director of Property for Life, says: “Serious investors are taking a long-term view. They are certain they will see significant returns over many years.”

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