Specialist buy to let mortgage lender Paragon has welcomed Labour's General Election pledge to force rental properties to undergo an annual ‘Property MoT’.
Nigel Terrington, chief executive of Paragon, says banks already impose strict conditions on landlords as part of their loan agreements, so encouraging the whole sector to improve standards would not be an extra burden for lenders.
Commenting on Labour introducing a legal requirement for landlords to submit their properties for annual inspection should the party enter government - with fines up to £100,000 for the worst landlord offenders - Terrington adds: “We do that anyway. Before we make a loan, we send a surveyor and if a property is not up to scratch we do not lend against it.”
In a report to its shareholders and the City, showing a strong performance by the lender in the year to the end of September, Paragon says that while the general UK economic outlook remains uncertain, the underlying metrics within the private rental sector are more positive - chiefly because the tenure is so large and still growing.
“The Group is also confident that its robust approach to valuation and the loan to value coverage in its buy to let book, at 67.3 per cent provide significant security in the event of a downturn” shareholders are told in the company statement.
“With the private rental sector representing a fifth of households, professional landlords are vital to the UK's housing provision and the Group sees significant business opportunities in providing them with the financial support that they require” it concludes.