Home Residential PropertyBuy-To-LetBritish lender Paragon looks to professional landlords for buy-to-let growth

British lender Paragon looks to professional landlords for buy-to-let growth

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23rd Nov 17 9:00 am

Slim rise in full-year pre-tax profit

British lender Paragon Banking Group has recorded a slim 1.1 per cent rise in full-year pre-tax profit.

According to Reuters, Paragon said its focus on professional landlords helped to drive a surge in its buy-to-let business even as tax and regulatory changes made the property market tougher for smaller investors.

Buy-to-let is a form of residential investment in which one buys a property, typically with a mortgage, with the view of renting it out.

Paragon said 71 per cent of applications in its core buy-to-let business were from professionals as of the end of September, rather than people renting out one or two properties.

Traditionally, 90 per cent of buy-to-let market in the UK was owned by amateur investors. However, a string of tax and regulatory changes announced last year has made the sector less attractive to such โ€œdinner partyโ€ landlords, allowing larger institutions to grab market share.

โ€œThese changes disrupted the level of market activity during the year, dampening demand in the sector at an aggregate level. Against this backdrop the groupโ€™s performance has been strong,โ€ Paragon said.

Overall lending in the wider buy-to-let market has reduced from about ยฃ40bn to about ยฃ35bn this year, CEO Nigel Terrington told Reuters.

โ€œWhile the wider market is weaker, our market share is strongerโ€ฆ in the areas that produce the better customers, who are able to deliver enhanced margins and stronger relationships,โ€ Terrington added.

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