Paragon Mortgages ups profit by 8% year-on-year

Michael Lloyd

November 21, 2018

Paragon’s Mortgages division achieved an 8% increase in underlying profit before tax to £157m for the 12 months ended 30 September 2018.

The lender saw new mortgage lending rise by 11% to £1.6bn, while its traditional buy-to-let lending was up by £96m to almost £1.5bn.

In second charge mortgages, new origination levels rose 17% to £71m and specialist residential lending reached £57m – up from £4m in 2017 when Paragon’s initial residential lending pilot was launched.

John Heron, managing director of mortgages, said: “The UK private rented sector continues to see strong levels of demand from tenants, which is expected to continue for the foreseeable future.

“The most recent regulatory changes in the buy-to-let market require lenders to collect and analyse more information about the landlord’s property portfolio and, as a result, some lenders have restricted their buy-to-let proposition.

“However, Paragon’s expertise in complex underwriting is well aligned with these developments, positioning us well to benefit from the changes and increase our market share.”

As expected, buy-to-let completions were dominated by complex business as Paragon’s focus on professional landlords came to the fore.

Complex business, which includes mortgages for portfolio landlords, finance for HMOs and landlords operating within limited company structures, increased to 79% of advances.

Paragon ended the year with a strong buy-to-let pipeline, up 29% to £779m and has recently extended its buy-to-let product range to include mortgages for expat landlords looking to finance rental property in the UK and for UK holiday lets.

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