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Buy-to-let market remains strong
Wed, 29 Aug 2007
The buy-to-let mortgage market is staying strong despite rising borrowing costs, Paragon has revealed.

Although property prices have increased and mortgage lending rates have risen, rents have also been pushed up meaning landlords can increase their mortgage repayments . Annual total returns for landlords have been put at 11.6 per cent - the highest level since April.

Chief executive of Paragon Group Nigel Terrington commented that landlords are more likely to withstand the effects of rising interest rates .

"They are not completely sheltered from the effects of rising rates but we would expect arrears in the sector to continue to perform better than those in the mainstream market," he said.

Buy-to-let investors are providing housing for young people who cannot afford to get onto the property ladder, Mr Terrington added.

Figures released by the Council of Mortgage Lenders recently show that buy-to-let mortgages accounted for 12 per cent of all new mortgage loans .

Paragon holds £9 billion of buy-to-let assets and one in ten mortgages is provided by the company.

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