Do more to stimulate lending, pleads Paragon

Specialist buy-to-let lender Paragon has called on the Government to do more to stimulate new lending.

Paragon, classed as a non-bank lender, has closed its books to new business for over a year, although it is still dealing with existing clients who want to refinance their portfolios.

John Heron, director of mortgages, said: "Our landlord customers continue to experience tenant demand at record levels, and these customers are also benefiting from a low interest rate environment.

"Demand for buy-to-let investment is robust, but investors' ability to grow their portfolios is restricted by a lack of available finance across the buy-to-let mortgage market. Prior to the credit crunch, non-deposit taking lenders played a major role in the buy-to-let market, but the closure of the wholesale funding markets has inhibited their ability to conduct new business.

"According to independent research, available loan products have reduced by 95% during the past two years.

"Whilst Government support schemes have encouraged banks and building societies to resume lending to businesses and consumers, non-deposit taking lenders have been excluded and have received no Government support. It's important that the Government recognises the importance of specialist lenders in the mortgage market and provides the support needed to aid their return to new lending.

"The Government has acknowledged the importance of the private rented sector and has said more needs to be done to encourage good existing landlords to grow their businesses, but the individuals and lenders that have stimulated the growth of the market so successfully over the past decade are being ignored."


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