Paragon scraps fees for portfolio landlords

The company has removed the normal application fee of £150 and the valuation fee for a limited period only.

It follows the launch of four two-year fixed portfolio products, starting at 2.99 per cent at 75 per cent loan to value for single, self-contained units and 3.20 per cent for houses in multiple occupation or multi-unit blocks.

John Heron, managing director for mortgages at Paragon, said: “It’s important to us that our buy-to-let products represent the very best value and choice to our landlord customers and intermediary partners.

“This offer, whilst only available for a limited time, does just that and we hope it will be a welcome piece of good news for landlords in an otherwise challenging market of late.”

A number of lenders have been adding incentives to their buy-to-let offerings following the introduction of tax and regulatory changes for portfolio landlords – defined as those with four or more properties.

In October, Keystone relaxed a number of criteria around its buy-to-let proposition, while Mansfield Building Society said it would allow a landlord’s personal income to be taken into account when assessing affordability.

More recently, Nationwide’s buy-to-let arm The Mortgage Works announced the launch of a pilot scheme aimed at professional landlords borrowing through limited companies.

The moves follow the introduction of a 3 per cent stamp duty surcharge for additional property purchases in April 2016 and the announcement that income tax relief for landlords would be gradually phased out by 2020, starting in April 2017.

A further blow came with the Prudential Regulation Authority’s (PRA) introduction of more stringent affordability rules on 1 January this year, followed by stricter underwriting guidelines for portfolio landlords brought in at the end of September.

Evidence has since emerged that buy-to-let landlords are selling up or paying down their mortgage debt in response to the changes.

Mike Richards, director at London-based Mortgage Concepts Associates, commented: “This will help portfolio landlords who, at the moment, are almost out in the cold. It is always nice to have no valuation fee – especially in the London area, where it makes a big difference to what you have to pay up front.

“To not have an application fee and not pay anything up front to assess the case is a good idea. It will help Paragon drum up business – and their rates are not bad, either.”

simon.allin@ft.com