Paragon Bank has reported a 4.4% increase in its buy-to-let mortgage loan book on the back of strong retentions and new lending.

For the full-year to the end of September 2024, Paragon grew its buy-to-let mortgages loan book to £13.3bn.

Total new lending of £2.73bn was delivered, in line with market guidance (2023: £3.01bn), with £1.49 bn of new buy-to-let mortgage business (2023: £1.88bn) and  £1.24bn of advances in the commercial lending division (2023: £1.13bn).

Total new advances in the second half of the year were 20.3% higher than in the first six months, and the year-end pipelines in both buy-to-let and development finance, at £0.88bn and £0.20bn respectively, were 47.7% and 31.0% higher than their positions at September 2023, which Paragon insists, will drive volumes in the new financial year.

New lending accelerated in the second half of the financial year as market sentiment improved, with completions 30% higher in the second half than the first.

Paragon also showed a further increase in the proportion of lending on properties with an EPC rating of between A and C. The bank lent £795.3m on EPC A-C properties during the period, accounting for 53.4% of completions, up from 49.9% last year.

Redemptions on the buy-to-let book fell to 6.7% from 9% a year previously, with redemptions higher in Paragon’s legacy pre-2010 buy-to-let book.

Paragon Bank revealed operating profit before fair value items increased by 5.4% to £292.7m (2023: £277.6m).

Commenting on the latest figures Paragon chief executive Nigel Terrington said: “We have seen accelerating momentum throughout the year, with new lending levels reaching the upper range of our expectations and strong customer retention. Improving customer sentiment, robust year-end pipelines, and our strategic focus on specialist markets, gives us confidence as we enter the new financial year.”

Paragon Bank managing director of mortgages Louisa Sedgwick, said: “We are delighted to announce a 4.4% increase in our buy-to-let mortgages loan book in challenging market conditions. New lending accelerated in the second half of the financial year, and we enter the new year with great momentum, with our new business pipeline 48% higher.”

She added: “2025 promises to be an exciting year for Paragon. We are launching our new, bespoke mortgage originations platform, making it quicker and easier for intermediaries to submit cases, which will reduce the time from application to offer.”