A broker, who wished to remain anonymous, suggested that the lender had rapidly reined in its product range and was giving no reason for rejecting applications.
Speaking to Mortgage Introducer, the source said: “I think Mortgage Trust and Paragon are having funding issues because they seem to be loathe to commit to new deals. Although this is happening with a few lenders, because of the market conditions, Mortgage Trust has given no reason for its refusal to offer certain deals.”
The lender confirmed that shares had fallen, but indicated that this would not represent a ‘Northern Rock’ style crisis.
John Heron, managing director at Paragon, said: “Paragon has built a unique position as a leading lender in the buy-to-let market. The quality of the assets generated is second to none with market leading arrears performance, relatively low loan-to-values and excellent affordability. We are confident that, albeit slowly, investor demand for high quality assets such as these will return to normal over the medium term and that this should form a sound basis for future growth.
He added: “As far as new build is concerned, while Paragon has some concerns about certain blocks in some areas, we have continued to lend on good quality propositions where capital values are sound and where there is good evidence of strong rental demand.”
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