Underlying Group profits were £70.1 million for the first half compared with £69.4 million for the same period last year, with a strong contribution from the Group’s mortgage lending operations.
After a quiet second half for buy-to-let last year following the distortion in the market caused by the increase in Stamp Duty Land Tax, new mortgage lending rebounded well in the first half, up 65% to £556.2 million (H2 2016: £337.4 million). Lending showed strong growth across the period as interest from portfolio landlords picked up with completions in Q2 increasing 100.3% to £371.0 million compared to £185.2m in Q1.
In addition, the pipeline of new buy-to-let business going into the second half more than doubled to £742.3 million (2016 H1: £350.6 million), highlighting the value of the specialist knowledge and products that Paragon provides to intermediaries and landlords as they navigate through the changing fiscal and policy landscape.
As expected, an increased proportion of applications were received from landlords with more specialist needs, with six out of ten pipeline applications (64.7%) coming from landlords with larger and more complex property portfolios and over a quarter of pipeline applications (26.5%) from landlords operating in limited company structures.
Outside of buy-to-let, the Group achieved strong growth in asset finance, where new lending increased by 84.7% to £106. 6 million and in its other lending products, including car finance and development finance, where lending grew by 54.8% to £105.6 million.
John Heron, Managing Director, Paragon Mortgages, said:
“The buy-to-let market is changing as a result of the developments in tax and regulatory policy towards the sector. We have seen greater polarisation in recent months in the market as professional landlords have shaped their investment strategies to mitigate the impact of these changes. With many years’ experience in delivering the more specialist products and services that these landlords require, Paragon is clearly in a strong position to benefit from this significant realignment in the market.”
