"A 25% increase in new lending shows the underlying strength of demand in the buy-to-let market. There remains an acute mismatch between supply and demand in the rental market and landlords are responding "
- Louisa Sedgwick - Paragon Bank
Paragon Bank has reported a 25% rise in new buy-to-let lending during the first half of its financial year, driven by ongoing landlord demand in a tight rental market.
In results covering the six months to 31 March 2025, Paragon confirmed £812.2m in new buy-to-let loans, up from £649.3m over the same period last year.
The bank’s total mortgage loan book grew 4.5% year-on-year to £13.7bn, with buy-to-let loans continuing to represent the vast majority of that portfolio.
The lender also completed the full roll-out of its updated buy-to-let mortgage originations platform during the reporting period. The system is designed to provide faster and more flexible application handling for brokers, supporting earlier decision-making and improving conversion rates.
“A 25% increase in new lending shows the underlying strength of demand in the buy-to-let market. There remains an acute mismatch between supply and demand in the rental market and landlords are responding,” Louisa Sedgwick (pictured), managing director of mortgages at Paragon Bank, said.
She continued, “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 performance of the existing buy-to-let portfolio remained stable. The annualised redemption rate was 7.1%, and arrears remained low at 0.51% — significantly below the broader market figure of 0.85%. The average loan-to-value ratio for the buy-to-let book held steady at 62.8%.
Across all business lines, Paragon’s loan book reached £16bn following 4.9% growth. Lending rose 11.4% to £1.38bn, with Development Finance and SME Lending contributing alongside buy-to-let.
Group-wide, pre-provision profits grew by 5.2%, while underlying profits increased by 2.1%, rising to £149.4m.
Nigel Terrington, chief executive officer of Paragon Banking Group, added, “We delivered another strong financial and operational performance in the first half of 2025, reflecting our disciplined approach and consistent track record of execution. 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.”
