One of the most famous names in buy to let mortgages, Paragon, has revealed that it’s on the acquisition trail.
There had been widespread speculation that it was looking to extend its activities further outside specialist buy to let, and now the banking group has made a statement to its shareholders. It says:
“Paragon Banking Group PLC (‘Paragon’) notes the press speculation in relation to a possible acquisition of Titlestone, the residential development finance lender. The purchase of loan books and bolt-on businesses represents a core part of Paragon's growth and diversification strategy.
“Paragon confirms that it is in the early stages of considering a possible acquisition of Titlestone.
“There is no certainty of an agreement being reached nor as to the terms of such agreement. A further update will be provided as appropriate.”
Back in November Paragon warned that the number of new BTL mortgages being taken out had dropped since a raft of new restrictions and regulations were introduced by the government.
It said that although its own business had grown in the past year, the issue of mortgage interest tax relief reductions introduced by the government for landlords had a particularly damaging effect on the wider BTL mortgage market.
The 2016 Prudential Regulation Authority’s changes to lending rules for so-called portfolio landlords - those with more than four properties - has also hurt the sector said Paragon.
The group enjoyed a profit rise of 1.1 per cent from £143.2m to £144.8m in its most recent trading year.