Heron said the drop from £41bn last year showed a step change in landlord activity and he expected the market to be softer going forward.
“Landlords are buying fewer properties and the market has turned to a one third purchase and two-thirds remortgage,” he said, adding that the slack in the market has been closed by professional investors.
Heron said although next steps are still unclear, he said the government has not been persuaded yet that the conduct and business around buy to let is adequate. He suspects there could be a thematic assessment of the market early next year followed by a conduct and business regulation consultation.
The complex and specialist buy-to-let and residential mortgage lender has also relaunched its website.
Paragon gained its UK banking licence in 2014 and has more than £12bn of assets under management and after launching savings, asset finance, motor finance, residential development finance and structured finance product lines.
Paragon’s residential mortgage products will also adopt the new Paragon brand.
“The wider brand alignment across buy-to-let and residential mortgages as well as the broader Paragon product range combines all our specialist finance expertise under one banner, giving all our customers and intermediary partners a clearer picture of who we are and all that we offer,” the lender said.