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New mortgage lending at Paragon reaches £1.6 billion

  • New mortgage lending grows by 11% to £1.6 billion
  • Complex landlord business makes up 79% of buy-to-let completions
  • Buy-to-let pipeline reaches £779 million at year end, up 29% on prior year

Paragon’s Mortgages division revealed another year of strong growth in new lending today as the specialist bank reported an 8% increase in underlying profit before tax to £157 million for the twelve months ended 30 September 2018.

New mortgage lending at Paragon grew by 11% to £1.6 billion in total, with Paragon’s traditional buy-to-let lending up by £96 million to almost £1.5 billion.

Alongside buy-to-to let, Paragon’s other mortgage offerings also delivered good growth. In second charge mortgages, new origination levels rose 17% to £71 million and specialist residential lending reached £57 million - up from £4 million in 2017 when Paragon’s initial residential lending pilot was launched.

As expected, buy-to-let completions were dominated by complex business as Paragon’s specialist expertise and focus on professional landlords came to the fore. Complex business, which includes mortgages for portfolio landlords, finance for HMOs and landlords operating within limited company structures, increased to 79% of advances.

Paragon’s strong performance was underpinned by a range of innovations during the year which included refreshed criteria for incorporated landlords, upgraded support for intermediaries with online product switch and further advance capabilities and technology improvements to enhance productivity.

Paragon ended the year with a strong buy-to-let pipeline, up 29% to £779 million and has recently extended its buy-to-let product range to include mortgages for expat landlords looking to finance rental property in the UK and for UK holiday lets.

John Heron, Managing Director of Mortgages, said:

The UK private rented sector continues to see strong levels of demand from tenants, which is expected to continue for the foreseeable future.

The most recent regulatory changes in the buy-to-let market require lenders to collect and analyse more information about the landlord’s property portfolio and, as a result, some lenders have restricted their buy-to-let proposition. However, Paragon’s expertise in complex underwriting is well aligned with these developments, positioning us well to benefit from the changes and increase our market share.

21 November 2018

Paragon Bank PLC is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Registered in England number 05390593. Registered office 51 Homer Road, Solihull, West Midlands B91 3QJ. Paragon Bank PLC is registered on the Financial Services Register under the firm reference number 604551