Paragon Bank saw a 25% rise in new buy to let lending in the first half of its financial year with growing landlord demand, the company says.

Unveiling results for the six months to March 31, Paragon recorded £812.2m in new BTL loans, up from £649.3 million for the same period last year.

Paragon’s mortgage loan book finished the period 4.5% higher at £13.7 billion, with BTL comprising the overwhelming majority of the book.

Paragon’s managing director of mortgages, Louisa Sedgwick, says: “A 25% increase in new lending shows the underlying strength of demand in the BTL market. There remains an acute mismatch between supply and demand in the rental market and landlords are responding.”

She adds: “We were delighted to launch our new mortgage originations platform during the period, and we have enjoyed a fantastic response from our intermediary partners. This system is already delivering tangible benefits; our pipeline is now a more accurate reflection of future business as we are able to screen applications more effectively and efficiently and give brokers earlier decisions.”

The annualised redemption rate on the BTL book remained low at 7.1% and arrears modest at 0.51%, below the broader BTL market figure of 0.85%. The loan-to-value coverage of the BTL book remains unchanged at 62.8%.