Paragon Mortgages saw new buy-to-let lending fall from £1.33bn last year to £1.16bn this year, its annual results to September 2016 reveal.
In what Paragon Group branded “a transitional year” it still achieved 9.1% growth in underlying profit to £146.9m, up from £134.7m in 2015.
John Heron (pictured), director of mortgages, said it was a “year of two halves” because of the 3% stamp duty surcharge coming into force in April, which resulted in a rush to buy beforehand and loss of appetite afterwards.
He added: “Our pipeline of new business is now gathering momentum with an increase of approaching 20% in October.
“Much of this is due to the success of Paragon Bank in providing us with diversified funding allowing us to deliver a series of competitive products which is driving an increase in application volumes.
“In particular we are seeing an improvement in the professional landlord segment of the market, a sector we are well positioned to satisfy given our extensive experience of meeting their individual requirements.”
“Whilst the buy-to-let market has had a challenging year, we continue to see the potential the sector has to offer. With strong rental demand, there will continue to be a growing need for professional landlords to provide quality, private rental accommodation and, with our 20 years’ experience in the market, we remain very well-positioned to work with these landlords.”