Paragon, the buy-to-let mortgage specialist, is predicting a slowdown in the housing market next year. The Daily Telegraph. The Times
However, chief executive Nigel Terrington shrugged off concerns of a Northern Rock-style crisis. Paragon funds itself entirely in the wholesale money markets, which have virtually shut down.
Terrington said the lender has completed a £1bn securitisation and has commitments guaranteeing it a total £1.8bn of capacity – ‘adequate at current rates of new business to fund lending into 2008’.
On the longer-term outlook he said: ‘As far as the capital markets are concerned, it is inconceivable that they will remain closed forever… there is still a lot of money in the system.’
Britain’s third-largest buy-to-let lender warned that its new variable-rate mortgage rates were likely to go up over the coming weeks.
Terrington blamed the recent higher cost of funding in wholesale markets for what could be a rise of ‘between 10 and 20 basis points from here in’.