A look back at another remarkable year – Rowntree

by: Richard Rowntree, Paragon Bank's managing director of mortgages
  • 22/12/2021
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A look back at another remarkable year – Rowntree
Although not quite as remarkable as the one that came before it, 2021 will still go down as a memorable year.


With such a dynamic market, it felt like almost every week we saw a new five-year high or first since records began – end of year industry data highlights how this year’s £45bn of gross buy-to-let mortgage lending is the highest for over a decade.

If the last two years have showed us anything it is that we have to expect and be ready to adapt to change. That said, I do think that some of the changes we’ve experienced throughout 2021 are not fleeting so recounting them provides some insight into ways the market may be impacted in future.

Stamp duty holiday regional impact

One of the most significant influencers of market activity was the stamp duty holiday.

While the fact that the tax saving on offer caused a rise in purchases will come as no surprise, the impact of the scheme when viewed at a regional level offers clues of a shift that we may see more of moving forward.

Looking at overall house purchase numbers, it appeared that the impact of the scheme was greatest in London, the South East and South West. However, when making comparisons to levels recorded in 2015 – the last full year prior to the introduction of the buy-to-let surcharge – we see that these regions actually experienced lower levels of purchase activity.

Conversely, in the North East and Yorkshire and The Humber, the stamp duty holiday saw purchases surpass 2015 levels.

The greater influence of the stimulus on these locations supports the idea that the north of England is increasingly offering opportunities for investors – a combination of healthy tenant demand and the relative affordability of property results in strong and stable yield performance.

Green agenda key for PRS sector

Even before the COP26 conference put environmental issues in the spotlight, the green agenda was gaining traction, its influence on areas such as political policy and investment increasing.

Paragon was one of the first lenders to launch mortgage products offering preferential rates for properties with EPC ratings A-C, incentivising landlords to increase the proportion of energy efficient homes in the PRS.

The government has proposed that all private rental properties will be required to reach this standard by 2028. Due to the older stock profile of the PRS, this will require substantial investment to fund widespread retrofitting of energy saving measures so sustainability is an issue that will continue to shape the industry in 2022 and beyond.

Importance of BDMs

During the year we learned a lot through our interaction with brokers and something that struck me was their view on the importance of business development managers (BDM).

Dispelling any rumours that the adaption of technology, accelerated by the pandemic, would reduce the need for BDMs, brokers told us that BDMs are very important.

Of those surveyed, 44 per cent of brokers said that the role of the BDM had become more important during the pandemic, a further 47 per cent feeling that they are as important as before.

With brokers feeling that important aspects of the BDM role include problem solving, availability and responsiveness as well as product knowledge it seems that the role is one that can be enhanced by technology and not replaced by it.


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