The buy to let industry was quite noisy during the last couple of weeks. I don't know how many times I've seen media stories telling me that everything is just fine, and that seasoned buy to let investors are picking up bargains as property prices soften. Like the old song goes, "when the going gets tough the tough get going." The buy to let hard nuts dive right back in into a declining market, when the more anxious and nervous types are pulling out.
Unfortunately, the credibility of this media hype took a serious knock today. Paragon, the pinnacle of the buy to let industry, suffered a sharp fall in half year profits. Furthermore, the credit crunch has forced it to cut new lending by more than half.
Nevertheless, Nigel Terrington, the chief executive of Paragon remains confident. "While the credit environment has been significantly disrupted and new lending levels have been reduced accordingly, we do expect a return to market stability in due course."
So according to Nigel, it is only the nasty credit environment that holding everything back. If only credit conditions could improve, the housing market will improve, sales volumes will increase, and prices will again begin to rise. If it was only that simple.