Jan 23 (Reuters) - Paragon Banking Group posted a rise in first-quarter lending as 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.
Paragon, which focuses on mortgage and business finance, said new lending rose 24 percent to 469.8 million pounds ($656 million) in the quarter ended Dec. 31.
Paragon’s buy-to-let lending rose to 342.9 million pounds from 185.2 million pounds a year earlier.
Buy-to-let investors buy residential property, typically with a mortgage, with the aim of renting it out. House prices have been outpacing a rise in wages for Britons, leading people to rent more, making buy-to-let an attractive investment.
The buy-to-let market is facing stricter regulations and the most recent regulatory changes require lenders to collect and analyse more information about a landlord’s property portfolio.
Paragon said this had resulted in a “realignment of competition”, with a number of mainstream lenders shrinking their buy-to-let business.
“Paragon’s experience and capability is well aligned with these new requirements, allowing the Group to increase its share of more specialist portfolio landlord business,” it said on Tuesday.
The lender’s Idem Capital division, a consumer debt buyer and servicer of third-party loans, saw no new deals completing during the quarter.
Commercial lending jumped 21 percent to 103.3 million pounds in the quarter. ($1 = 0.7162 pounds) (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty)