I joined Paragon in January 2020 and to say a lot has happened since then is quite an understatement.
Coming into this role, I wanted to build on the work of my predecessor, John Heron, who had orchestrated Paragon’s growth into one of the leading specialist buy-to-let lenders. But, as we know, it was around this time that Covid hit, and the focus shifted to supporting our staff and customers through this extremely challenging time.
Working through crisis
There’s a saying about never wasting a crisis and Covid tested us. The extra operational pressure that the pandemic brought helped us to identify areas that we could enhance while proving that we could be agile and bold in our decision making.
This gave rise to a far-reaching digital transformation project with transparency and consistency at its core, both facets of the customer journey that were now more important than ever.
Processes were redesigned to deliver service improvements quickly. We enhanced areas that were not tech dependent, while investing in our people through recruitment and development of the talent we already had.
Knowing that the next few years would see a rise in customers reaching mortgage maturity, we worked to overhaul the entire remortgage process. Application to offer time was reduced from in excess of 40 days to just a few and a process to automatically authorise further advances with selected customers was developed.
With rising rates leaving borrowers facing substantially higher mortgage repayments than those of the five-year fixes they were coming off, this work took on extra significance so it was great to be on the front foot in supporting customers.
Last year, this helped us increase buy-to-let lending by 18.2 per cent to £1.9bn and with 2018 seeing substantial volumes of five-year fixes written, we anticipate remortgaging accounting for a high proportion of lending this year too.
The progress we’ve made over the last few years means we’ll be well-positioned to support remortgage customers, particularly those with four or more properties or homes in multiple occupation (HMOs) in their portfolios and landlords operating through limited companies due to our increased focus on professional landlords.
A sense of pride
I’m proud of how we’ve responded to all of the challenges that the last few years have thrown at us and how we have been at the forefront of the market.
Examples that spring to mind include being amongst the first specialist lenders to offer preferential rates on properties with EPC ratings of A to C and to reduce interest coverage ratio (ICR) calculations to enable borrowers to continue investing following the mini Budget.
Our manual underwriting, where each application is individually assessed by a skilled member of our team, will remain but we’re removing what I call the ‘heavy lifting’. Technology will reduce the resource needed to carry out time consuming tasks such as finding and inputting information.
This will free up the capacity for our people to use their expertise to find solutions to some of the most complex cases.
While stringent, our approach to underwriting has resulted in a book that benefits from a strong credit rating and has around 98 per cent of loans classified as specialist. We’ve carved out our niche, thriving in the specialist lending space, and the ability to lend where others can’t means we are well equipped to continue to support much needed investment in the private rented sector, as important now as it has ever been as the UK enters a period of recession.
Wider industry work
Looking at financial services more broadly, I’ve worked to see positive change in diversity and social inclusion within the industry.
It has been fantastic to be involved with all of the great work of the City of London’s Socio-economic Taskforce, becoming a board member of Progress Together.
Mortgage Solutions has hosted a number of events that help us explore how we can create a more diverse and inclusive financial services sector, where people progress based on merit, not fit, and I’m keen to build on the progress that has been made so far.
