Landlord demand helps fuel 25% lending growth at Paragon

Paragon Bank has reported a 25% rise in new buy to let lending for the first half of its financial year.

It reached £812.2 million compared to £649.3 million in the same period last year.

The surge, the bank says, reflects strong demand from landlords responding to a persistent shortage of rental properties.

Paragon’s mortgage loan book grew by 4.5% to £13.7 billion, with BTL mortgages forming the bulk of this portfolio.

Strength in the BTL market

The bank’s managing director of mortgages, Louisa Sedgwick, said: “A 25% increase in new lending shows the underlying strength of demand in the buy to let market.

“There remains an acute mismatch between supply and demand in the rental market and landlords are responding.”

She added: “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.”

Paragon’s profits rise

Paragon maintained a low annualised redemption rate of 7.1% on its BTL portfolio, with arrears at 0.51%, notably below the market average of 0.85%.

The loan-to-value ratio for its buy to let book held steady at 62.8%.

Beyond mortgages, Paragon’s overall loan book grew by 4.9% to £16 billion, with total lending up 11.4% to £1.38 billion, driven by growth in development finance and SME Lending.

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