Trading Statement

Paragon Group Of Companies PLC
21 September 2004


                               TRADING STATEMENT

The Paragon Group of Companies PLC will shortly be meeting analysts ahead of its 
close period for the year ended 30 September 2004. The following is an update of 
the trading position of the group ahead of the year end and follows the interim 
results which were announced on 26 May.

The Directors are pleased to report that the Group has traded in line with 
expectations. Trading has remained strong throughout the second half of the year 
in both the buy-to-let and personal finance businesses, with the overall level 
of advances by the Group being significantly higher than last year. Credit 
performance continues to be in accordance with plan, with no deterioration in 
credit quality across the Group and the performance of the buy-to-let portfolio 
in particular remains exemplary.

Our buy-to-let business, comprising Paragon Mortgages and Mortgage Trust, has 
enjoyed significant growth in the level of advances and in the volume of new 
business in the pipeline, compared to a year ago. Similarly, Mortgage Trust has 
performed well in the second half with completions recovering strongly from the 
temporary reduction which followed the rationalisation of the new business 
products in favour of buy-to-let reported in our interim statement.

A number of recent surveys suggest a positive environment for landlords, with 
tenant demand increasing. There is no evidence to date either from our own 
portfolio or from industry data that landlords are reducing their holdings, 
indeed new information from the Association of Residential Letting Agents shows 
that a majority of current buy-to-let investors are expecting to buy further 
investment properties in the next twelve months. Notwithstanding the recent 
increases in interest rates it is evident that the continuing rise in tenant 
demand, the impact of uncertainties about the future of house prices on 
potential owner occupier buyers and the perception that interest rates may be 
nearing their peak creates a positive environment for residential renting.

Mortgage Trust Services plc, a subsidiary company, has been successful in its 
application for permission under Part IV of the Financial Services and Markets 
Act 2000 to become authorised to carry on mortgage and/or general insurance 
business.

The directors are pleased to report that overall their expectations for the year 
ended 30 September 2004 remain unchanged.

The Board of Directors intends to announce the preliminary results for the year 
ended 30 September 2004 on 24 November and a full report on the progress 
achieved by the Group will be issued at that time.

For further information, please contact:

Nigel S Terrington
Chief Executive - Tel [phone]
or
John L Wriglesworth
The Wriglesworth Consultancy - Tel: [phone]


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