Optimism Rising After UK Budget – Paragon CEO Says
- Optimism is picking up among small landlords after the disruptive mini-budget, according to the chief executive of Paragon bank.
- Richard Rowntree said the market had been "very challenging" in the wake of Kwasi Kwarteng's September proclamation,which sent mortgage rates soaring.
- However, he said that the situation had stabilised and that there was a sense of "calm returning" to the market.
Tuesday 27 January 2026 12:51 pm
Optimism is picking up among small landlords after the disruptive mini-budget, according to the chief executive of Paragon bank.
Richard Rowntree said the market had been “very challenging” in the wake of Kwasi Kwarteng’s September proclamation,which sent mortgage rates soaring.
However, he said that the situation had stabilised and that there was a sense of “calm returning” to the market.
“immediately after the mini-budget,there was a lot of uncertainty and volatility,” Rowntree said. “Rates went up very quickly, and there was a lot of concern about what that would mean for landlords and borrowers.
“But things have settled down now. Rates have come down a bit, and there’s a bit more confidence in the market.”
Paragon,which specialises in lending to landlords,has seen a pick-up in applications in recent weeks,Rowntree said.
“We’re seeing more landlords looking to expand their portfolios, which is a good sign,” he said.
“There’s still a lot of demand for rental properties, and landlords are confident that they can get good rents.”
Rowntree said that the goverment’s decision to scrap most of the tax cuts announced in the mini-budget had helped to restore confidence.
“the market reacted positively to the government’s U-turn,” he said.
“It showed that they were willing to listen to concerns and take action to stabilise the economy.”
Though, Rowntree warned that the market was still facing challenges, including high inflation and rising interest rates.
“We’re not out of the woods yet,” he said.
“There are still a lot of economic headwinds, and it’s likely that rates will go up again before they come down.”
But he added that he was optimistic about the long-term prospects for the rental market.
“There’s a chronic shortage of housing in this country,and that’s not going to change anytime soon,” he said.
“As an inevitable result,demand for rental properties is highly likely to remain strong for the foreseeable future.”
Paragon bank boss Nigel Terrington has said he believes market sentiment is beginning to lift, after a challenging period for the FTSE 250 lender Paragon has said, after sentiment was dampened by rampant tax speculation in the second half of 2025.
Nigel Terrington,the boss of Paragon bank,told City AM that despite it being the early days of 2026,the mood was beginning to lift.
“Obviously we’re only in January but I would say it feels more optimistic”, he said.
It comes as Paragon gave markets a brief snapshot of its first quarter of the financial year, with commercial lending giving the bank a major boost.
In the three months to 31 December 2025, paragon recorded a 6.9 per cent jump in total lending to £724m. This was fuelled by the commercial lending growing 17.6 per cent to just shy of £300m.
Economic Slowdown in Late 2025 Linked to Tax Speculation
Businesses across the United Kingdom experienced weakened demand in the second half of 2025, largely attributed to growing uncertainty surrounding potential tax increases as Chancellor Rachel Reeves prepared to address critically important public finance gaps. this slowdown was especially pronounced in London, where inner-city house prices saw their steepest decline as the 2008 global financial crisis in November.
Impact on Business Demand
The subdued demand reported by businesses stemmed from speculation about Chancellor reeves’ plans to fill a substantial hole in public finances. The uncertainty surrounding potential tax adjustments led companies to postpone investment decisions and consumers to curb spending.
According to reporting by City A.M., the tax speculation contributed to a broader economic slowdown. Close Brothers, for example, experienced significant disruption due to the motor finance scandal, further impacting the lending landscape.
London Housing Market Decline
London’s housing market experienced a sharp downturn in November 2025, with inner-city house prices falling at the fastest rate since the 2008 financial crisis.
The decline in London property values reflects a broader trend of economic caution and reduced investor confidence.The exact percentage of the price decline in November 2025 was not immediately available, but reports indicated a significant impact on the capital’s property market.