Leading student landlord mortgage lender Paragon has announced record profits and a 45% surge in new property investment loans.
The Paragon Group of Companies, which runs Paragon Mortgages, has released full-year results for the year ending September 30, 2012.
After closing the door on mortgage lending for three years following the credit crunch, the results reflect re-launching the buy-to-let mortgage business, signing of two warehouse facilities to fund lending.
Highlights from the full-year results include:
• Pre-tax profit up 18% to £95.5 million (2011: £80.8 million)
• Buy-to-let lending up 45% - £184.3 million advanced (2011: £127.0 million)
• Total warehouse funding facilities increased to £450 million
John Heron, managing director of Paragon Mortgages, said: "Our focus for this past year has been to grow the buy-to-let business and increase funding capacity. This has been successfully achieved.
"Buy-to-let is the only area of the mortgage market that is growing at a healthy and sustainable level. We have a strong capital base and are well-funded which gives us a platform on which to grow our buy-to-let lending through our Paragon Mortgages and Mortgage Trust brands."
Paragon is a leading lender to student landlords as one of the only mainstream companies offering house in multiple occupation (HMO) mortgages for shared homes and property investment companies.
Typical loans range between 65% and 75% loan to value for several fixed rate and tracker deals.
Rent cover is 130% for HMOs and 125% for most other homes.
The firm’s increasing business is supported by the growth of private landlords offering homes to students, rising rents and general confidence in the buy to let market which has seen lending rise over recent months, according to the Council of Mortgage Lenders.
The CML figures showed the value of buy-to-let lending in the first nine months of 2012 amounted to £11.8 billion, 19% higher than the £9.9 billion advanced over the same period in 2011.
