Buy-to-let
It is Paragon's aim to return to its market-leading position in the buy-to-let sector, specifically targeting professional landlords. This is an area of the market currently underserved by buy-to-let lenders and one which Paragon is well-positioned given its expertise and experience in buy-to-let lending. Paragon will offer a range of buy-to-let products through the Paragon Mortgages brand.
The product range includes fixed rates starting from 5.3 per cent and tracker rates starting from 4.3 per cent. Paragon's lending criteria mean it can offer professional landlords facilities that are not widely available elsewhere, such as limited companies, multi-unit blocks and Houses in Multiple Occupation (HMOs).
Paragon will maintain a prudent and risk-averse approach to new lending, placing greater value on long-term customer relationships, credit quality and profitable products rather than simply market share. Paragon underwrites each application on an individual basis, rather than solely relying on computer scoring, employs its own team of surveyors to assess the property thoroughly and designs its products to appeal to good quality, experienced landlords. This strategy has proved successful for Paragon and is a driving factor in the excellent credit performance of the Group's assets.
The number of accounts more than three months in arrears across Paragon's portfolio of buy-to-let mortgages has continued to fall and is currently just 0.86 per cent of the book. This is significantly below buy-to-let market peers and also the wider mortgage market.
Products
Fixed
Two-year fixed at 5.30 per cent 2 per cent fee 65 per cent max LTV
Two-year fixed at 5.50 per cent 2.25 per cent fee 75 per cent max LTV
Tracker
Two-year 4.30 per cent (Libor + 3.5 per cent) 2 per cent fee 65 per cent max LTV
Two-year 4.80 per cent (Libor + 4 per cent) 2.25 per cent fee 75 per cent max LTV
Five-year 4.55 per cent (Libor + 3.75 per cent) 2 per cent fee 65 per cent max LTV
Five-year 5.05 per cent (Libor + 4.25 per cent) 2.25 per cent 75 per cent max LTV
Commenting on the announcement, Nigel Terrington, Paragon Group's chief executive, says: "Despite the difficult environment over the past three years, Paragon has remained steadfast in its commitment to return the business to new lending when conditions permitted.
"Competition in the mortgage market has been sorely lacking over the last couple of years. Nowhere is this more evident than in the private rented sector where tenant demand is strong and expected to grow. Competition is vital for a healthy and vibrant buy-to-let market and we aim to provide that competition.
"Professional landlords with more complex buy-to-let requirements, such as HMOs or multi-unit blocks, have been particularly underserved and we will specifically target this market segment. Supply of private rented sector property is already under severe strain, which is leading to rental inflation. It will be professional landlords who stimulate the growth of the sector and we want to be there to help them achieve this."
