Paragon Group has revealed profits of 82.8m, with lending up by a whopping 82% in the 12 months to September 30 2006.
Paragon originates loans primarily via its two brands – Paragon Mortgages and Mortgage Trust. New loans rose from 1.7bn in 2005 and for the first time exceeded 3bn. Total buy-to-let mortgage balances outstanding grew to 7bn, an increase of 43% on last year’s figure of 5bn.
Paragon has also reported a decline in the number of accounts in arrears, despite the significant growth in the book.
John Heron, group director of mortgages at Paragon, says: “Both our brands are firing on all cylinders, with excellent business volumes generated via our intermediary partners. We maintain active relationships with some 4,000 intermediaries, from major national networks to small-scale brokers with just one office.
“With their help, we have been able to grow our book of buy-to-let mortgages to record levels, reaching over 73,000 loans up from 59,000 a year ago.”
He says that in the longer term tenant demand for privately rented property is expected to continue to grow on the back of social, demographic and economic factors. This in turn will generate further growth in buy-to-let mortgage lending.
He adds: “With Paragon’s position as the only specialist in the buy-to-let mortgage market, we are well placed to benefit from this growth in the future.
Lee Grandin, managing director of Landlord Mortgages, says Paragon’s results are mainly down to the success of Mortgage Trust.
He says: “I’d put the group’s success down to Mortgage Trust. The buy-to-let market has increased a little, but to increase business by 82% must also be down to an increase in market share.”