Buy to Let Funding Starts Flowing Again

The specialist buy to let lender Paragon announced yesterday its return to the UK buy-to-let mortgage market. This is indeed good news as it signals some lenders return of confidence in the UK housing market and will be welcomed by those reliant on the housing industry who have been subjected to a number of negative press reports in the last week about the risks of a double dip recession and significant collapse in house prices.

Paragon closed its books in the wake of the credit crunch, since the peak of 2007, the number of buy-to-let products has fallen from over 3,600 in July 2007 to approximately 280 today.

An increase in buy to let funding should add positive stimulus to the property market by completing the bottom run of the buying chain and creating much needed rental housing.

The news will also be welcomed by new homes construction industry as buy to let investors often target first time owner style homes.

We shall no doubt see other lenders similarly recognising that with the current ingredients of keener house price levels, rent levels and tenant demand makes for a low risk lending proposition.

Martin Cunningham

Commercial Director homes24

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