Paragon saw a significant increase in first-half underlying profit supported by its buy-to-let offering.
The specialist lender has announced that its first-half underlying profit rose 4.7% to £73.4m, fuelled by strong buy-to-let lending volumes.
New buy-to-let lending increased by 21% to £670.5m in the first six months ended March 31, from £556.2m, thanks in part to recent landlord tax and regulatory changes.
Heading into the second half, the lender reported a pipeline of new buy-to-let business of £788m, up 6% compared with the same period last year.
Paragon reports that the proportion of its advances to corporate and complex landlords over the six months was 72%, up from 60% last year.
There was also a sharp rise in borrowers opting for buy-to-let mortgages on a fixed-rate period of five years, making up 72% of advances, which Paragon says is double the level recorded in 2017.
John Heron, managing director of mortgages at Paragon, commented: “Recent tax and regulatory changes have had a significant impact on the buy-to-let market driving a polarisation between smaller scale and more professional portfolio landlords and a retreat of some lenders from the provision of new products for portfolio landlords.
“Paragon’s many years of experience in this segment and focus on specialist underwriting means that we are well positioned to cater for the requirements of the larger scale, professional landlord with potential to outperform in this strategic segment of the market.”
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