Demand for buy-to-let lending boosts Paragon Bank
Paragon Banking Group reported a strong start to the financial year on the back of higher lending to buy-to-let landlords.
In a trading update covering the three months to December, the FTSE 250-listed lender said its net interest margin (NIM) was running ahead of expectations while business volumes were in line.
NIM measures the gap between interest received on loans and rates paid for deposits.
Paragon, based in Solihull in the West Midlands, is a major provider of loans to professional landlords with at least four properties. It also lends to medium-sized housebuilders seeking loans up to £35m.
New lending across the quarter totalled £677.4m, compared to £610.7m in the first quarter of 2024.
Buy-to-let lending totalled £432.2m in the quarter, up from £336.3m last year, while commercial lending advances fell to £254.2m from £274.4m previously.
It said the fall in commercial lending was “primarily a result of timing differences in our structured lending business with the other business lines performing strongly”.
Paragon’s buy-to-let pipeline at the end of the quarter stood at £691.9m, nearly 24 per cent higher than a year earlier.
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