Paragon Bank lending reaches £1.6bn

The specialist bank reported an eight per cent increase in underlying profit before tax to £157m for the twelve months to 30 September 2018.

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

In second charge mortgages, new origination levels rose 17% to £71m and specialist residential lending reached £57 million – up from £4m the previous year when it piloted.

The lender, which gained its banking licence, said: “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.”

Intermediary focus

During the year, Paragon refreshed its criteria for incorporated landlords, added an online payment switch function for intermediaries and upgraded its technology to ‘enhance productivity.’

Paragon ended the year with a strong buy-to-let pipeline, up 29% to £779m. In November, it 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.”