Paragon Bank has announced a 4.4% increase in its buy to let mortgage loan book on the back of strong retentions and new lending, plus a burgeoning new business pipeline. 

Unveiling its full-year results for the 12 months to the end of September 2024, Paragon grew its buy-to-let mortgages loan book to £13.3 billion.

New buy-to-let lending for the year stood at £1.49 billion, with the new business pipeline 48.2% higher than the previous year at £881.4 million. 

New lending accelerated in the second half of the financial year as market sentiment improved, with completions 30% higher in the second half than the first.

Paragon also recorded a further increase in the proportion of lending on properties with an EPC rating of between A and C. The bank lent £795.3 million on EPC A-C properties during the period, accounting for 53.4% of completions, up from 49.9% last year.

Redemptions on the buy-to-let book fell to 6.7% from 9% a year previously, with redemptions higher in Paragon’s legacy pre-2010 buy-to-let book.

The post-2010 buy-to-let book, comprised of landlords with more specialist requirements and larger portfolios, grew by 9.7% and now represents 79.2% of the Mortgage division’s total assets.

Arrears on the buy-to-let book increased slightly to 0.38% from 0.34% at the same point last year, but were down from 0.68% at the half year period (31 March 2024).

Louisa Sedgwick, Paragon Bank Managing Director of Mortgages, says: “We are delighted to announce a 4.4% increase in our buy-to-let mortgages loan book in challenging market conditions. New lending accelerated in the second half of the financial year, and we enter the new year with great momentum, with our new business pipeline 48% higher.”

She adds: “2025 promises to be an exciting year for Paragon. We are launching our new, bespoke mortgage originations platform, making it quicker and easier for intermediaries to submit cases, which will reduce the time from application to offer.”

Overall, Paragon Banking Group recorded a 5.4% increase in operating profits before fair value items to £292.7 million and a 5.6% increase in its net loan book to £15.7 billion.