It’s been a year of two halves for buy-to-let borrowing, according to the latest financial results from Paragon Mortgages.
A Year of Two Halves for Buy-to-Let Borrowing
The firm reported a strong performance across all of its business lines in the year to October, contributing to a 9.1% increase in underlying profits, totalling £146.9m.
The Director of Mortgages at the group, John Heron, comments: “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% in October. Much of this is due to the success of Paragon Bank in providing us with diversified funding, allowing us to deliver a series of competitive products, which is driving an increase in application volumes.”
He continues: “In particular, we are seeing an improvement in the professional landlord segment of the market, a sector we are well positioned to satisfy, given our extensive experience of meeting their individual requirements.
“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.”
While buy-to-let borrowing may have had a mixed year, how has the rest of the market fared?
The British Bankers’ Association (BBA) has also published its High Street Banking Statistics for October.
It found that house purchase approval numbers are 10% lower than in October last year, while they’ve dropped by 4% in the first ten months of the year when compared to the same period of 2015.
However, the Chief Economist at the BBA, Dr. Rebecca Harding, says: “Mortgage approvals ticked up a little October. There has only been a relatively modest increase in activity since the Bank of England cut rates in August.”