Paragon Mortgages’ parent, Paragon Group, posted a 9 per cent increase in underlying profit to £146.9m, as buy-to-let completions fell 14.2 per cent to £1.16m.
The firm says the overall profit rise in the year to 30 September was due to organic growth, new income streams, M&A activity and improved capital management.
Paragon Group’s proportion of non-buy-to-let lending rose to 29.5 per cent of its total lending, up from 11 per cent in 2015.
Paragon Mortgages’ total loan assets in the year to 30 September were £8.76bn, 4.9 per cent lower than the £9.22bn figure last year.
A statement by the group says: “This reflects the trend to focus an increasing share of the Group’s new buy-to-let lending through Paragon Bank and also for the Bank to purchase previously securitised buy-to-let loans, moving the balances between divisions.”
The group also said that its Paragon Bank subsidiary wants to launch a specialist residential lending range this year.
Paragon director of mortgages John Heron says: “This was very much a year of two halves for buy-to-let with very strong completion levels being seen in the run up to the stamp duty increase in April followed by a commensurate reduction in activity levels across the market from April.
“However, our pipeline of new business is now gathering momentum with an increase of approaching 20 per cent in October.”
Heron adds that Paragon is still positive about buy-to-let.
He says: “Whilst the buy-to-let market has had a challenging year, we continue to see the potential the sector has to offer.
“With strong rental demand, there will continue to be a growing need for professional landlords to provide quality, private rental accommodation and, with our 20 years’ experience in the market, we remain very well-positioned to work with these landlords.”