Paragon lending rises 66pc
In its half yearly report the group said pipeline business had more than doubled in the same period, underpinning further growth for the second half.
The statement said: “These results are particularly pleasing in that they demonstrate how far the business has progressed in its strategy as a leading specialist lender.
“The delivery of increasing profits, 10.4% ahead of the comparable period last year, has been achieved whilst the group has also made considerable investment supporting its growth prospects for the future.”
Trading activity for both Mortgage Trust and Paragon Mortgages in the year was billed as “strong” with the segment contributing £44.7m to underlying group profit against £39.8m in the first half of 2014 – an increase of 12.3%.
Total loan assets of the segment at 31 March 2015 were £8,993.5m, 3.3% higher than the £8,707.6m a year earlier, of which £8,749.2m were buy-to-let mortgage assets (31 March 2014: £8,414.2 million).
The report said: “The background of robust growth in private renting and buy-to-let has provided a strong platform for further growth in buy-to-let lending for the group in the first half of the financial year.
“As a result of improved access to funding through both Paragon Bank and the group’s continuing success in structured finance markets, the group’s mortgage business has been able to expand its proposition and compete more widely in its chosen markets.”
The Group has maintained two distinct propositions, one targeting professional landlords and the other private investor landlords, which together ensured that it has maintained and developed its market position throughout the year.
This has resulted in buy-to-let completions increasing by 65.7% to £446.2m for the period (2014 H1: £269.3 million).
The lender added: “The group has clearly been the beneficiary of growth in the buy-to-let market but it has also been able to capitalise on this growth as a result of the strong relationships it has in mortgage distribution and the dynamic approach that is taken to product development.
“The business constantly appraises the competitive position of its products in the market and conducts regular research amongst the landlord community to fine tune product offerings.”
New loans had a good affordability profile, low average loan-to-value ratios and strong customer credit profiles.
The percentage of loans three months or more in arrears stood at 0.20% as at 31 March 2015 (31 March 2014: 0.30%, 30 September 2014: 0.25%) and remained considerably better than the Council of Mortgage Lenders’ comparable market average of 0.70% at that date (31 March 2014: 0.95%, 30 September 2014: 0.78%).
The lender also revealed its warehouse capacity increased to £750m.