Paragon doubles buy to let as market ‘realigns’

by: Heather Greig-Smith
  • 23/05/2017
  • 0
Paragon doubles buy to let as market ‘realigns’
Paragon doubled its mortgage lending in the first quarter of 2017 as buy to let shifted to more complex deals.

The group said the six months to September 2016 were quiet for buy to let, distorted by changes to Stamp Duty Land Tax.

However, in the six months from October new mortgage lending has “rebounded” – up 65% to £556m from £337m.

Interest from portfolio landlords has increased, with completions 100% higher in the first three months of 2017 than the previous quarter. Portfolio completions reached £371m, compared to £185m in the last quarter of 2016.

Paragon added that its pipeline of new buy to let business had more than doubled, reaching £742m (from £351m). This was also skewed towards landlords with larger and more complex property portfolios. Six out of ten pipeline applications were from landlords with complex portfolios and over a quarter of applications were for landlords using limited company structures.

John Heron (pictured), managing director of Paragon Mortgages, said there had been a “significant realignment in the market”.

“The buy-to-let market is changing as a result of the developments in tax and regulatory policy towards the sector. We have seen greater polarisation in recent months in the market as professional landlords have shaped their investment strategies to mitigate the impact of these changes.”

Underlying profits were £70m for the group’s first half (to 31 March 2017), compared with £69m for the same period last year. Development finance lending grew by 54.8% to £105m.

In April, Paragon announced the completion of its first development project and said it had projects under way across the country.

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