John Heron, managing director of Paragon Mortgages, says his firm has a substantial appetite to lend after its parent revealed a £39.5m pre-tax profit last week.
The Paragon Group of Companies reported a 34.8% increase in pre-tax profits in the six months to March 31 2011, compared with £29.3m in the first half of 2010.
The lender announced last August that it was to recommence buy-to-let lending after securing a £200m mortgage warehouse facility from Macquarie Bank.
Since then, £50.2m has been advanced in buy-to-let lending at an average LTV of 68.9%, with £94.7m in the pipeline.
The group’s arrears of more than three months has also fallen to 0.75% of the book, compared with 1.17% in the first half of 2010.
Heron would not disclose if the lender has set any targets for how much lending it wants to do in 2011 or what share of the market it is chasing.
But he says: “Lloyds Banking Group and The Mortgage Works have dominated the supply of buy-to-let finance in recent years and it has been frustrating for us to sit on the sidelines.”
Heron says Paragon is pleased to be back in the game and has been encouraged by business levels to date.
He adds that it is too early to say when it will launch its first securitisation deal but it is expected this year.
David Whittaker, managing director at Mortgages For Business, says Paragon’s presence is important to the market.
He says: “I believe Paragon will be looking to increase its lending this year. The fixed costs of carrying out a securitisation are incredibly high and you would not want to do it for less than a few hundred million.
“If Paragon has only done £50.2m of lending since its launch it could be some way away from its first securitisation.”