Buy To Let Lenders Profits Up

Paragon Group the UK largest buy-to-let lender’s profits were up 1.1 per cent on 2008’s £53.7m. The group attributes its resilience to carefully mortgage book management.

The Paragon Group has revealed pre-tax profits of £54.3m for Q3 2009, up slightly on 2008’s figures. The buy-to-let lender’s profits were up 1.1 per cent on 2008’s £53.7m. The group attributes its resilience to carefully mortgage book management. In spite of this, the Group’s loss provisions increased in Q3, up to £66.2m, up from £62.2m 12 months ago. Paragon chief executive Nigel Terrington says: “In a year which has seen a deep UK recession and continuing turmoil in credit and banking markets, Paragon has fared well, significantly strengthening its position at a time when many of its competitors have failed.” It reports arrears on its mortgage book peaked in the spring and fell steadily throughout the second half of the financial year. In Q3, 1.54 per cent of accounts were more than three months in arrears up from 0.53 per cent in Q3 2008. Over the last 12 months, Paragon has begun managing more than a £1bn of third party mortgage books as well as launching a buy-to-let insurance arm, Redbrick. It also consolidated full ownership of the specialist buy-to-let broker, The Business Mortgage Company. Terrington adds: “We will continue to manage our book carefully and to look for new business opportunities to supplement growth as we have during 2009. Whilst these are early days, recent improvements in funding markets will encourage us to look more confidently to reinstating the funding programme to support new lending going forward.” Galvan Research head of trading Ed Woolfitt says: “Paragon has reported a promising set of full year numbers, and delivered a strong arrears performance, significantly better than industry average. “As the property market firms up and starts to improve, niche sector operators like Paragon are set to benefit substantially. We believe the improving prospects and strong cash position puts Paragon into pole position as a recovery play.”

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