"Listening to brokers, we know that with interest rates remaining high, we need to look at different ways of making the sums work for some borrowers."
FR: How did you get into property and what is your current role in the industry?
I started my career in finance working as a customer account manager for Beneficial Finance (a subsidiary of HSBC Bank), which was just a fancy way of describing an outbound telesales position. As a then 20-year-old, with no banking experience, this really was a baptism by fire, and was the beginning of what would be a 15-year journey with HSBC. After working in sales, I moved into several other positions in collections, risk, and complaints, before progressing into a managerial role within complaints.
As soon as I saw the advert for Paragon, I knew it was the perfect role for me, combining the fast-paced world of sales, with the technical and analytical elements I have developed during my career with HSBC.
Starting as product co-ordinator at Paragon in February 2022, my role was to support the delivery of our product proposition, keeping a close eye on the buy-to-let market to ensure we remained competitive, and offered products that met the needs of landlords. Progressing into my current role as product manager, I am now focused on enhancing our position within the market even further.
FR: And what does your role entail?
Essentially, the role is about developing mortgage products for buy-to-let landlords. I undertake modelling to forecast how a range of different metrics will change over time so we can price products accordingly.
The key is trying to strike the right balance between conflicting priorities; we must be competitive in the market, offering products that are attractive and enable landlords to invest in much-needed privately rented homes, while ensuring our lending aligns with our business strategy and risk appetite.
The strength of our loan book reflects the emphasis we place on carefully managing risk, with lending criteria ensuring the business we take on has the right credit profile, whilst helping to drive up the standard of PRS property.
We also consider the impact that pricing has on business volumes because we understand how important speed and service are to brokers and customers, especially in the fluid and rapidly changing market we’ve seen over the past year.
FR: How involved are brokers in the process?
We’re constantly reviewing our proposition and lending criteria as we want to provide products that offer solutions to a diverse mix of cases.
Brokers are central to this. Our regional sales managers work closely with our brokers, getting their feedback so we can identify areas where we can be better and improve our understanding of what we can do to help them place business with us.
FR: What are the main challenges?
As I said, the market has been unusually fluid over the past year, with swap rates moving by 10 or 20 basis points in the space of a day or two. This is a challenge because a lot of work goes on behind the scenes developing products that should perform well at that point in time, but changes in the market can mean that they no longer deliver sufficient returns or are not as competitive - we’re trying to hit a constantly moving target.
FR: Paragon recently announced the appointment of Louisa Sedgwick as commercial director – presumably someone you’ll be working with closely?
Yes, Louisa has recently joined Paragon and we’ve already started to work on several different projects.
It’s a fantastic appointment for Paragon as Louisa brings a wealth of experience and can offer a different perspective and new ideas to drive positive change.
FR: What does the rest of the year hold for the market?
If the last few years have showed us anything, it’s that you never know what is around the corner to disrupt even the most sophisticated forecasting!
That said, I think it’s fairly safe to say that we won’t see a return to the ultra-low rates we saw a couple of years ago, or even the rates that we saw before the pandemic.
Recent inflation figures have caused more volatility in the swaps market, but we are starting to see some normalisation now and Paragon is one of a number of lenders who have been in a position of offering borrowers an improved choice of products, with both fixes and discounted variable rates launched.
Another issue that has the potential to have a big impact on the market is the proposed changes to EPC regulations. We’re hoping to get an update from Government ASAP and if this comes before the end of the year, I think we’ll see the retrofit market start to gain some traction.
FR: Will this have an impact on products?
Yes definitely.
Listening to brokers, we know that with interest rates remaining high, we need to look at different ways of making the sums work for some borrowers. One way we’ve done this recently is by adding fixed and no-fee options to our range and these should appeal to those who are looking to purchase or remortgage higher-value properties.
And as far as the EPC regulations, around 60% of PRS properties currently have an EPC rating below C and estimates place the average cost of necessary upgrades at around £10,000 per property. This means that we expect to see a substantial number of landlords looking for financial support, something we’re currently working on so watch this space!
