Landlord demand and new platform drive 25% rise in lending volumes
Specialist lender Paragon Bank reported a sharp increase in buy-to-let lending in the first half of its financial year, driven by stronger demand from landlords.
In results for the six months to March 31, 2025, the bank said new buy-to-let advances reached £812.2 million, a 25% rise from £649.3 million during the same period in 2024.
The bank’s total mortgage book increased by 4.5% to £13.7 billion, with buy-to-let making up the majority of lending. The overall loan book stood at £16 billion, up 4.9% year-on-year.
Paragon also highlighted the full launch of its updated buy-to-let mortgage platform during the half-year. The system is designed to improve the application process for intermediaries, allowing quicker screening and earlier lending decisions. According to the bank, it has already helped improve pipeline accuracy and application conversion rates.
“A 25% increase in new lending shows the underlying strength of demand in the buy-to-let market,” said Louisa Sedgwick (pictured), Paragon Bank’s managing director of mortgages. “There remains an acute mismatch between supply and demand in the rental market and landlords are responding.
“We were delighted to launch our new mortgage originations platform during the period, and we have enjoyed a fantastic response from our intermediary partners. This system is already delivering tangible benefits; our pipeline is now a more accurate reflection of future business as we are able to screen applications more effectively and efficiently and give brokers earlier decisions.”
The bank reported that buy-to-let redemption rates stayed low at 7.1%, while arrears remained at 0.51%, below the broader market average of 0.85%. The average loan-to-value on the buy-to-let portfolio held steady at 62.8%.
Across the group, Paragon posted a 5.2% rise in pre-provision profits and a 2.1% increase in underlying profits, which reached £149.4 million. Lending across all divisions rose by 11.4% to £1.38 billion, including gains in development finance and SME lending.
“We delivered another strong financial and operational performance in the first half of 2025, reflecting our disciplined approach and consistent track record of execution,” said Paragon Bank’s chief executive Nigel Terrington. “With strong momentum and a resilient business model, we are well placed to navigate the evolving external environment and remain optimistic about the remainder of the financial year and beyond.”
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