Paragon Mortgages boss Nigel Terrington believes the buy-to-let mortgage market will grow by over 20% this year, according to the Evening Standard. Terrington believes the market will soon shrug off fears of more interest rate rises and of a housing price bust.

The report stated that ‘the £30bn buy-to-let boom is here to stay because rich fortysomethings want an investment substitute for their bombed-out pensions while at the same time there is soaring demand from twentysomethings who want to rent because they have no intention of settling down yet.’

Paragon Mortgages and Mortgage Trust reported an 82% explosion in lending advances to £3bn to the end of September 2006 and a 15% rise in profits to £82m. The company’s market share has grown from 5% to 10% as a result.

Terrington says that the average buy-to-let investor is ‘someone in their late forties from a high socio-economic AB status who is financially experienced and astute and who is in the investment market for the long-term.

These are people who have increasing concerns over their pensions and want to invest in something they understand, in fact probably know quite a lot about, something they can control and manage. That is property. Most buy-to-letters buy within their vicinity because they know their home market and they are looking to build on their initial investment.