Buy-to-let lending between March and June 2017 was particularly strong at £458m, compared with £166m in the third quarter of 2016 which followed the increase in Stamp Duty for buy-to-let purchases.
The lender’s Q3 trading update confirmed professional landlords and complex portfolios are now 70% of mortgage applications up from 62% at the start of the year. At the end of the quarter, the new buy-to-let business pipeline totalled £700m.
The group said its diversification strategy was paying off, growing new asset finance and other specialist lending by 66% to £330m in nine months.
John Heron, managing director, Paragon Mortgages, said: “The buy-to-let market has been the subject of repeated fiscal and regulatory intervention in recent times. This is changing the nature of buy-to-let and what we are seeing emerge is a more specialist market with a marked increase in more complex, professional landlord business.
“This is very well aligned with Paragon’s experience and capability as underlined by today’s strong trading figures and by our early implementation of phase two of the Prudential Regulation Authority’s (PRA) regulatory requirements for buy-to-let,” he added.
Paragon implemented the next phase of Prudential Regulation Authority changes in July, two months before the industry deadline on 30 September.
The new PRA rules will affect portfolio landlords with lenders required to use additional affordability tests on landlords with a portfolio containing four or more mortgaged properties.
Brokers are reportedly encouraging clients to refinance ahead of the changes to escape business bottlenecks and the more complex lending affordability assessments.