Paragon Group has made its much-anticipated return to new lending with a buy-to-let mortgage range targeting professional landlords.
The company will lend through its Paragon Mortgages brand and is to start lending with immediate effect through a panel of buy-to-let brokers.
Paragon will expand its distribution over the next few weeks, and will accept both intermediary and direct business.
Macquarie Bank is providing a £200m revolving credit facility to bankroll Paragon’s return to lending, marking the first buy-to-let mortgages the company has offered since February 2008.
The credit facility can also be used to fund any securitisation deals Paragon wishes to issue in the future.
At the same time as announcing its new buy-to-let range, Paragon has issued a trading update with expected operating profits for the year to September 30, 2010 estimated to be between £40.5m and £65m.
Paragon Group director of mortgages John Heron (pictured) says: “We are really excited about our return to new lending. The market is still fairly subdued and the road back to a ‘normal’ market is going to be a long one, but we are back in the race and we will do our level best to make sure that we expand the choices available in buy-to-let finance for landlords and intermediaries.
“Competition is vital for a healthy and vibrant buy-to-let market, and we aim to provide that competition. Supply of private rented sector property is already under severe strain, which is leading to rental inflation. It will be professional landlords that stimulate the growth of the sector, and we want to be there to help them achieve this.”
Products include a two-year fixed rate deal at 5.30 per cent, with a 2 per cent fee and available up to 65 per cent loan-to-value.
There is also a range of two-year and five-year trackers including a two-year tracker at 4.80 per cent, or Libor plus 4 per cent. The fee is 2.25 per cent and the product is available up to 75 per cent LTV.
Paragon says it will place greater value on long-term customer relationships, credit quality, and profitable products rather than just chasing market share.
Each application will be underwritten on an individual basis. Paragon says its lending criteria means it can offer buy-to-let mortgages to limited companies and on multi-unit blocks and Houses in Multiple Occupation.