The results go some way to explaining why the lender branched into residential lending this month, as buy-to-let trading fell from £400.9m from October to December 2015 to £185.2m in the same three months of 2016.
Paragon Mortgages saw buy-to-let’s share of trading fall from 87% from October to December 2015 to just 48.6% one year later.
The results go some way to explaining why the lender branched into residential lending this month, as buy-to-let trading fell from £400.9m from October to December 2015 to £185.2m in the same three months of 2016.
On the flipside the lender had a very strong pipeline of £639.8m at the end of December 2016, up from £595.7m the year before when business was booming before the 3% stamp duty surcharge came into force in March 2016.
Therefore it seems likely the lender could see a strong start to 2017.
The buy-to-let market has had to cope with a raft of regulatory changes since last year, with the latest being stress tests from the Prudential Regulation Authority in January and the upcoming reduction in mortgage tax relief in April.
Paragon’s trading update said: “It is too early to determine the full extent of the PRA changes on the market, and the further changes due later in the year, however the strong pipeline, as detailed below, positions the group to achieve its anticipated new business volumes for the year.”
In terms of profit Paragon made £33.1m from October to December 2016 with the help of quarter-on-quarter volume growth of originations and investments to £380.7m, from £254.4m last year.
Nigel Terrington, chief executive at The Paragon Group, said: "We have made a strong start to a year that will see the Group continue its transition to a lending and operational model that is orientated around Paragon Bank.”
