Build to Let is an Unrealistic Idea says Boss of Paragon Mortgages

11 October 2012 Categories: News

Build to Let is an Unrealistic Idea says Boss of Paragon Mortgages

The recently published Montague Report, which outlines various recommendations for a ‘build to let’ housing sector, has been branded unrealistic by Paragon Mortgages boss John Heron, even though government ministers like the idea. The report suggests that institutions such as insurers and pension providers should be encouraged to invest in the ‘build to let’ housing sector in an effort to reduce the pressure on the already struggling social housing sector.

Speaking at the NALS conference, John Heron, said “I remain unconvinced this is the way forward. I believe that the returns, when fully costed, are not sufficient to encourage institutional investors into the private rental market.”

He then went on to suggest that more effort be put into driving up the standards of the properties already available and encouraging private landlords to invest further in the market. He particularly wanted to see more ‘professional’ landlords entering the sector as they are more likely to offer larger portfolios in much needed areas.

Mr Heron also pointed out that there are currently 1.2 million private landlords in the UK, and that only 2% of buy to let mortgages are redeemed annually; a figure that shows the private landlord community is committed long term.