Landlords moving into limited companies and HMOs have fuelled a big jump in lending.
Paragon Bank recorded a 25% increase in new buy-to-let lending in the first half of its financial year on the back of growing landlord demand, which Jeni Browne, business development director at mortgage broker MFB, says reflects what it is seeing in the market.
“More landlords are moving towards specialist setups like limited companies and HMOs because these structures can offer more flexibility and tax efficiency, which is especially important in today’s climate,” she explains.
Unveiling half year results for the six months to 31st March, Paragon recorded £812 million in new buy-to-let loans, up from £649 million for the same period last year.
The half year saw the full roll-out of its new buy-to-let mortgage originations platform for brokers which improves application screening, supports earlier decision making and is expected to deliver a higher conversion rate.
Underlying strength
Paragon’s managing director of mortgages, Louisa Sedgwick (pictured), says: “A 25% increase in new lending shows the underlying strength of demand in the buy-to-let market. There remains an acute mismatch between supply and demand in the rental market and landlords are responding.”
She adds: “Our pipeline is now a more accurate reflection of future business as we are able to screen applications more effectively and efficiently and give brokers earlier decisions.”
MFB’s Browne says Paragon’s pricing is very competitive, and its new mortgage platform is clearly making a difference. “As a lender, Paragon is very comfortable dealing with complex BTL; faster decisions and smoother applications are a big win for brokers and landlords alike,” she adds.
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