16:52 PM, 23rd November 2011, About 11 years ago
Buy to let lender Paragon Mortgages profits rose 12% to almost £81 million thanks to landlords building on their portfolios.
Paragon returned to lending in September 2010, and the pre-tax profit represents the first full year’s trading as a lender since the onset of the credit crunch.
The firm did not release lending figures, but as a lender they lag well behind the leaders in the market who make up at least two-thirds of lending – Nationwide through The Mortgage Works brand and Lloyds Banking Group via BM Solutions.
In fact, the Nationwide also announced trading figures revealing mortgage lending for the country’s biggest building society was up 30% in the year.
Platform, the Co-op Bank buy to let lending subsidiary also announced lending increased by 10% in the past year and accounts for 80% of all the bank’s mortgage applications.
Despite the lenders announcing higher borrowing figures, the Council of Mortgage Lenders (CML), the industry voice that speaks for all the UK’s major property finance companies, disclosed lending is still running at only a third of the levels seen at the peak of the buy to let market in 2007-08.
The lenders themselves often omit this information from their statements.
“The buy-to-let market has returned to growth, with the CML revealing a 39% increase in loans originated in the three months ending September 30. Conditions in the market are improving and, with increasing tenant demand, it is important that landlords have the opportunity to increase their portfolios,” said John Heron, Paragon’s managing director.
Platform has pledged to maintain lending for the next 12 months.
Lee Gladwell, Business Development Director at Platform said: “We responded to what intermediaries were telling us last year about rising demand in the rental market and took the decision to increase our support in this area during 2011.”
“Growth is undoubtedly driven by some first time buyers’ inability to raise deposits, but there are other factors. Uncertainty around the economy, greater need for employment mobility, more people in further education and higher student debt are all helping to fuel demand and create opportunities for landlords.”