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Paragon issues warning over buy-to-let market

Paragon has issued a stark warning to potential buy-to-let borrowers over the criteria used by many lenders to grant loans.


The specialist lender warns that many new borrowers are over reliant on rental income to cover the mortgage on their first investment property.


It says many of these borrowers are at risk of default on their loans because the criteria used by many of the new lenders in the buy-to-let market, underwrite the loan against the property and not the individual.


Paragon Mortgages managing director John Heron says: &#34We do not allow new borrowers to be over reliant on rental income to cover the mortgage on their first investment property.


&#34We are becoming concerned that the criteria adopted by a number of new lenders in this specialist market are clearly designed to underwrite the property, not the individual looking to make a relatively low risk investment.&#34

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