View more on these topics

Paragon profits up 84%

Specialist buy-to-let lender Paragon has posted a pre-tax profit of £29.3m for the six months to March 31 as the company continues to prepare to return to new lending.

John Heron
John Heron, director of mortgages at Paragon

Pre-tax profits are up 84.3% compared to the same period last year when profits were £15.9m.

Paragon says the results have been driven by the strong performance of its £8.5bn buy-to-let book.

Arrears across the portfolio stood at 1.17% as at the end of March against the Council of Mortgage Lenders’ buy-to-let industry average of 2.71%.

The number of properties in receivership has fallen to 1,602 as at March 31 from 1,945 as at September 30 2009.

John Heron, director of mortgages at Paragon, says: “We continue to prepare the business for the resumption of new lending.

“Conditions in the wholesale funding markets continue to improve and discussions are progressing with a number of parties to determine whether suitable financing arrangements can be agreed to support new lending.

“We hope to be able to update the market in due course, but as these discussions are still ongoing, we are unable to provide guidance over their timing or outcome.”

As Paragon continues to only offer new lending to existing borrowers, its buy-to-let book shrank to £8.46bn, down from £8.59bn at the end of September.

New buy-to-let lending to existing customers fell to £9.1m in March, compared to £25.2m in September and £10.7m in March 2009.

In its results Paragon says that the private rented sector has benefited from uncertainties in the housing market and in the economy.

The results say: “Looking forward, we expect interest rates to remain low for the foreseeable future and for the performance of the book to remain resilient when rates eventually increase.

“Strong rental demand is expected to continue to underpin borrower incomes and support the credit performance of the group’s buy-to-let portfolio, bolstering landlords’ motivation to maintain and grow their letting businesses.”

Recommended

Base rate frozen amid uncertainty

The Bank of England’s base rate decision was overshadowed by uncertainty over the new government. The Bank’s Monetary Policy Committee decided to keep the base rate at 0.5% for the 14th month running, while maintaining its quantitative easing programme. The Consumer Prices Index measure of annual inflation is at 3.4%, significantly above the 2% target […]

ED STUART-BROWN, HEAD OF PROTECTION SALES, FRIENDS PROVIDENT

Doctors’ cover can be good for brokers

Whatever profession you are in it is important to protect your income in the event of being unable to work due to accidental injury or illness. This is perhaps even more important in the medical profession where there is a high rate of sickness compared with the private sector. With long working hours, high stress […]

Newsletter

News and expert analysis straight to your inbox

Sign up
Comments
  • Post a comment
  • Geoff Laird 18th May 2010 at 3:29 pm

    Congratulations to Paragon on an excellent set of results for the first 6 months trading, clearly the time is fast approaching when this excellent Buy to Let lender returns to reassume its position as the best Buy to Let funder for professional investors in the UK.