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Rise in UK arrears

Thursday, November 26, 2009

Source: Catherine Deshayes

Buy-to-let lender, Paragon, has report a rise in arrears, with 1.54% of its mortgage book more than three months behind at the end of September 2009, compared with 0.53% a year earlier - however, the firm points out that the proportion is significantly less than the 3.23% industry average reported by the Council of Mortgage Lenders...

In presenting its annual results, Paragon says it set aside £65.9 million to cover bad debt in the 12 months to the end of September, up from £62.2 million a year earlier, although the charge for the second half of the financial year eased to £27.2 million, compared with £38.7 million during the first six months.

The group reported a 1.1% rise in pre-tax profit, to £54.3 million and chief executive, Nigel Terrington, has indicated that the group could soon re-establish new lending in the buy-to-let market.

According to Mr Terrington: "Whilst these are early days, recent improvements in funding markets will encourage us to look more confidently to reinstating the funding programme to support new lending going forward."

Research from financial website, Moneyfacts, indicates that over 90% of buy-to-let loans have disappeared since the beginning of the credit crisis, although earlier this month bridging finance specialist, Tiuta, actually launched a new buy-to-let product for the professional investor.

Source: www.homemove.co.uk