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Paragon’s BTL advances stand at £1.1bn year to date

Anna Sagar
Written By:
Posted:
July 30, 2024
Updated:
July 30, 2024

Buy-to-let (BTL) lender Paragon’s cumulative BTL advances are estimated at around £1.1bn in the year to date.

According to Paragon’s latest trading update, this is slightly down from £1.4bn of BTL advances in the same period last year.

The firm said that new business levels for BTL were “running ahead of expectations” and application levels were “strong”.

This has led to a pipeline of around £888.5m in the quarter, which is above £594.6m in September 2023.

Paragon said that BTL redemptions rose slightly in the period, with the annualised rate for the year coming to 6.5%. This is “low by historical standards” and below the 9.4% figure in the same period last year.

The company said that new lending levels and strong customer retention had led to net loan book growth of 5% year-on-year to £15.4bn.

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Three-month-plus arrears in BTL dropped to 44 basis points at the quarter end from 68 basis points in March.

Looking ahead, mortgage lending advances for the full year are estimated to come to £1.4bn to £1.6bn.

On the commercial lending side, lending volumes stood at £900m, with growth in SME and structured lending offset by lower motor finance and development finance levels.

However, the firm reported that heightened development finance enquiries at the half year have continued, with the pipeline up by 29% and the value of undrawn commitments staying elevated.

The lender added that the new government’s focus on new housebuilding “enhances the outlook for this sector”.

Paragon said that digital re-platforming was a “key pillar” of its strategy and its cloud-based mortgage origination platform was scheduled to be released in the “near future as the delivery process continues apace”.

Nigel Terrington, Paragon Group’s chief executive, said: “We have delivered another quarter of strong performance and progression against our strategic priorities, with strong growth across our loan and retail deposit books. Margins, costs and credit performance continue to perform in line with expectations, whilst strong new business flows reflect improving customer sentiment and more favourable economic conditions.

“Our multi-year digital re-platforming programme is progressing well, and we will launch our new mortgage origination platform in the near future. This customised, cloud-based platform will deliver improved efficiency and customer experience. Further technology driven initiatives are in process for subsequent delivery.

“We carry good momentum into the remainder of the year. Our strong balance sheet and high-quality customer base, allied with our in-depth sector expertise, positions us well to take advantage of improving market conditions and to support our customers in achieving their ambitions.”