The group, which is the parent company of Paragon Mortgages, lent out £990m in the nine months to 30 June compared with £817m in 2015.

The firm said it suffered a slowdown following the changes to Stamp Duty earlier this year, which saw a 3% premium introduced on second homes in April.

The firm had initially benefitted from an investor rush to complete buy-to-let mortgages, which hiked lending levels to £824m in the six months to the end of March.

But Q3 saw its pipeline of new deals reduce to £339m  – down 3% on the beginning of the quarter when it had £351m worth of deals waiting to be sealed.

Overall, Paragon increased its operating profits by 12% in the nine months from October, from £98m to £110m.

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The group said it planed to stick to its current diversification strategy going forward, which had so far seen the share of retail deposit-funded lending increase from 22.8% in June last year to 45.7% now.

It already raised its minimum affordability tests in January in a bid to reflect future landlord tax relief changes.

Mortgage interest relief for buy-to-let landlords is set to be cut from 45% to 20% in April 2017, partly to ensure a more prudent buy-to-let market and stamping out of ‘inappropriate’ lending.

Director of Paragon Mortgages John Heron said: “Paragon continues to see a wealth of opportunities in the buy-to-let sector. With tenant demand for quality, privately rented housing remaining high, private landlords will be the driving force behind trying to meeting this growing demand.”