Wednesday 2nd April 2008
Paragon Mortgages has published its latest trading figures for the six months leading up to the end of March 2008.
The financial services provider notes "volatility of the money markets in recent months" but adds that cashflow has remained strong from its loans portfolio.
However, new lending is less likely to be easy to come by, as Paragon reports limited availability of funding.
"Completions - particularly in the buy-to-let businesses - have been managed down in a controlled manner," the organisation asserts.
As such, during the first six months of 2008, "total advances will be some 50 per cent less than in the first half of 2007".
Paragon also reveals that up to 30 per cent of its workforce has been made redundant due to the reduction in new business.
However, it adds that adequate capacity has been retained to allow lending to resume at higher volumes should the markets recover sufficiently.
The statement contrasts with research published by Paragon on the same day which notes continued interest from the buy-to-let sector.
Director of mortgages John Heron comments: "Experienced landlords continue to regard property investment as a sound business."
He ascribes such a view as being inspired by the necessary use of rented property by those who, "through choice or circumstance", are unable to house themselves outside of the private rental sector.
Mr Heron concludes that large-scale investors in property are not "spooked" by the current market conditions as they are only likely to purchase domiciles which they know will provide a profit in the long term.
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