Paragon BTL lending stable as profits and margin up

Buy-to-let lending overall was stable year-on-year at £1.48bn compared to £1.5bn in 2018, with a 17 per cent increase in the pipeline of business in progress at year end to £912m.

For its full-year results to 30 September 2019, the lender saw specialist landlord business account for 89 per cent of its buy-to-let mortgage completions, up from 79 per cent in 2018. 

Paragon said it saw lower levels of buy-to-let redemption activity in the period at 8.6 per cent, down from 10.3 per cent in 2018. It said this was led by customer retention and “the extension of product maturity profiles”.

Specialist business also increased from 88 per cent to 91 per cent of the lender’s £912m buy-to-let pipeline. 

Overall, Paragon’s underlying profit before tax saw a five per cent uptick from £157m to £164m.

Notably, Paragon also saw its net interest margin increase to 2.29 per cent, from 2.21 per cent.

This is while margins at mainstream residential lenders are coming under increasing pressure and growing tighter.

John Heron (pictured), managing director of mortgages at Paragon, said: “Following tax and regulatory changes, professional landlords increasingly comprise the core investors in the UK’s private rented sector. 

“We continue to support them and our intermediaries with enhanced service and tailored products specially designed to meet their needs.”