Reach your savings goals with our simple, straightforward savings accounts and cash ISAs.
See all of our reviews
Have your cake, and eat it too, with our award winning Cash ISAs
Discover our range of specialist buy-to-let and residential mortgages, available through intermediaries.
If you're a landlord, you can only apply for our mortgages through an Independent Financial Adviser. Click below to find an advisor.
Don’t forget, our discounted buy-to-let products benefit from our Track to Fix feature!
Find the right finance to get you moving with our tailored business and personal loans.
Developed in response to your feedback about the need for speed, simplicity and accuracy of lending applications, you can now log in and apply in minutes.
Find all the latest news, stories, insights and tips from Paragon Bank.
The latest version of Paragon's long-standing PRS Trends Report, based on interviews with 201 experienced landlords, paints an encouraging picture of how landlords are managing their finances. Not only are landlords reducing the level of borrowings relative to property values but they feel well-placed to manage an increase in interest rates.
Landlords continue to reduce borrowing relative to property values – commonly referred to as gearing. At the end of Q4 2017, average gearing amongst our landlord panel was 35%, the joint-lowest loan-to-value (LTV) level recorded in over 15 years.
There is strong evidence over an extended period that gearing levels have consistently been at prudent, sustainable levels in the buy-to-let sector, with a peak of 43% LTV across all types of landlord over the last 15 years. Since that peak, gearing has been on a downward trend.
More than half of our panel landlords (55%) said that they would not struggle to maintain their mortgage payments regardless of what happened to mortgage interest rates. For those who anticipated difficulty, only 11% felt concerned at interest rates below 5%, 12% at rates of 5% and 22% at rates of 6% or higher.
Once again, for most landlords (51%) any decision to sell properties was not dependent on mortgage interest rates. Of those that do believe they would need to sell properties due to rising mortgage interest rates, the majority would not need to take any action until base rates reached 5%.
Five out of ten landlords said their decision to refinance was not dependent on mortgage interest rates. However, for those sensitive to interest rate, rates of 4% or above were most likely to trigger action.
In summary, there is no evidence to suggest lending to landlords has been anything but sustainable, and recent evidence shows that landlords are, in fact reducing LTVs. Given current low levels of gearing, landlord sensitivity to increase mortgage interest rates is much lower than might be expected, which is good news for the buy-to-let sector.
21 February 2018
Head officeParagon51 Homer RoadSolihullWest MidlandsB91 3QJ
Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551