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Lending falls at Paragon during Q4 of 2016
This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
Paragon Bank has become the latest buy-to-let lender to announce a fall in its buy-to-let lending in the final quarter of 2016. This has once again been attributed to the introduction of more stringent conditions for buy-to-let property purchasers.
In Q4, the Bank agreed mortgages for rental accommodation worth £185.2m, which was less than half of the £400.9m leant during the opening quarter of the year.
Clampdown
Alongside the more stringent stress tests for buy-to-let investors, the Government has also moved to clamp down on buy-to-let lending by removing wear and tear allowance, introducing a 3% stamp duty surcharge and phasing out mortgage interest tax relief.
Despite the fall in completions during the last three months of the year, Paragon feels that the market will improve significantly. This is due to the fact that more private rental properties are needed to meet increased demand from tenants.
Lending falls at Paragon during Q4 of 2016
Nigel Terrington, Paragon Group’s chief executive, noted: ‘We have made a strong start to a year that will see the group continue its transition to a lending and operational model that is orientated around Paragon Bank.’[1]
‘The lending growth we haven’t seen in asset finance is encouraging and reflects the increasing diversification of the group. Lending across all divisions and the strong growth in the buy-to-let pipeline bodes well for the year as a whole,’ Mr Terrington added.[1]
[1] https://www.landlordtoday.co.uk/breaking-news/2017/1/lending-to-buy-to-let-lending-falls-after-introduction-of-new-rules
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