Paragon BTL lending up 21% year-on-year

by: Carmen Reichman
  • 29/07/2016
  • 0
Paragon BTL lending up 21% year-on-year
Paragon group saw a 21% upswing in the demand for new buy-to-let lending in the first three quarters of the year compared with the same period last year, its latest results have shown.

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.

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.”

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