FT reports Paragon may soon be lending 14.04.2010

Author: David Whittaker Posted on: 19 April 2010

Arden and Partners note that Paragon are due to make their H1 trading announcement on 18 May and believe that the CEO will either announce a resumption of Buy to Let mortgages lending or will report on the fact that they are already back in new business mode. They even suggest that Paragon will initially lend a tranche of £300M and offer some viewings on capital support and net margin - details that are not available to the industry at large.

Paragon have long been the friends of professional landlords providing schemes for HMOs, Ltd Co and multi-unit lending. Having retained their own in-house valuers they are well positioned to assess additional risk (but higher reward) activities of refurbishment and some limited development...

Paragon have made no secret of their desire to make an early return; they have been profitable where otehrs have failed - they got no government financial support so their recovery is down to good management of their loan book - RBS, LBG and others would do weel to observe. Their share price now at c160p has a target price of 210p; when they start lending expect sentiment to drive it towards 235p and a resounding three cheers from brokers who look forward to their early return.

Our bet is they will want to launch in May but external events could still hold them back - this would be a pity. Bring it on !!!!

Author: David Whittaker