Buy-to-let lending was up by 85% on the previous half-year, where loans advanced to customers totalled £446m, while underlying profits at the group were also strong increasing by 12.5% to £71.9m.
Profit before tax also grew to £70m, up from £63m during the previous six months.
Paragon Group’s chief executive Nigel Terrington (pictured), admitted there was uncertainty over long-term growth prospects in the buy-to-let market but said the lender was well placed to continue development of its product offering.
“While there is some uncertainty over the longer term growth prospects in buy to let, we expect the tax and regulatory changes to provide relative benefits for the group’s specialist lending focus, in particular, the more complex requirements of professional landlords,” he said.
“Paragon operates with a strong capital base and an enviable credit record. Its leading position in the specialist buy-to-let market is now being complemented by a broader and more diversified series of business lines, including SME lending. This leaves the Group well placed to continue to develop and deliver increasingly broad product offerings for our customers, which in turn supports improving returns for our shareholders.”
Buy-to-let lending is expected to experience a lull during the second quarter of 2016, as the impact of the purchaser rush for properties during the first quarter washes through.
Paragon’s half year results showed that pipeline originations and investments in the six months to the end of March were significantly lower than the same period in 2015, down to £151.5m from £494m.
Paragon said the quality of its new lending remains high, with a good affordability profile, low average loan-to-value ratios and strong customer credit profiles.