Paragon Bank reported a 19% increase in buy-to-let lending during its first six months of the year to £1bn, adding it was seeing strong landlord demand following the mini-Budget.  

The specialist lender says that the BTL pipeline stood at £810m in the period to the end of May, compared to £1.34bn a year ago, “reflecting strong completions and weak application flows in the post-mini-Budget period.   

“Recent application flows are stronger, with the pipeline up nearly 20% from its intra-period low and continuing to increase after the period end.”  

The firm continues its focus on professional landlords who represented 98.6% of completions in its first half.  

Total mortgage and commercial new lending lifted by 6.9% to £1.59bn, driving a 4.6% year-on-year growth in the loan book to £14.6bn.  

The bank’s statutory pre-tax profit fell 67.7% to £46.4m, reflecting the unwinding of £82.5m of fair value gains recognised last year.  

Underlying profit lifted 22.2% to £128.9m.  

The lender raised its net interest margin – the difference between what it pays out to savers and what it charges for loans — to 2.95% from 2.57% a year ago.  

It raised its net interest margin guidance for the full year to around 3% from 2.89%.  

Paragon Bank chief executive Nigel Terrington says: “The group has a high-quality loan book, 99% of which is secured, virtually all on low loan-to-value properties.   

“Notwithstanding the more volatile and disruptive environment, our portfolios are performing resiliently.”  

Paragon Bank managing director of mortgages Richard Rowntree adds: “We are experiencing strong application flows following the issues caused by the mini-Budget, which reflects the strong underlying demand for BTL investment by portfolio landlords.”