Paragon profits up 11% on the back of buy-to-let boom

Paragon profits up 11% on the back of buy-to-let boom

Paragon Group’s operating profits totalled £98m for the nine months to the end of June, an 11 per cent increase on the same period last year, backed by booming business in the buy-to-let market.

Specialist lender Paragon Mortgages reported completions totalling £370.3m in the third quarter, a 98 per cent increase on the corresponding quarter last year. In terms of the year to date, buy-to-let completions reached £816.5m.

The pipeline of new business stood at £864.9mat the end of the quarter, compared to £352.7m at the same point in 2014.

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John Heron, managing director of Paragon Mortgages, said the firm has seen a substantial increase in market share over the last year.

“This is against a background of strong and sustained tenant demand in a private rented sector that has doubled in scale in the last ten years and now accounts for 4.9m homes.

“Buy-to-let plays an important role in supporting the sector and making sure the market can respond to this continued increase in demand for rented homes.”

Meanwhile, Paragon Bank’s medium term target of financing half the group’s new lending remains on track, with £124.1m of completions (representing 33.5 per cent of the group’s total lending) financed during the quarter.

At the end of June, Paragon Bank’s pipeline of new buy-to-let business stood at £259.7m, representing 30 per cent of the group’s total.

The group’s trading update stated that the recently announced Budget changes may impact some landlords’ investment decisions in the future, but the private rented sector continues to see strong tenant demand, thereby providing the platform for strong and stable buy-to-let returns.