Paragon Bank Predicts Buy-to-Let Boom, Reports Impressive Half-Year Profits
The UK could be headed towards another major buy-to-let boom, as wealthy investors and entrepreneurs seek to take advantage of skyrocketing property prices. According to Paragon Bank, new and established buy-to-let investors alike are looking to snap-up desirable homes ahead of a seemingly inevitable spike in demand for private rental properties.
As rapidly rising property prices continue to price families and first-time buyers entirely out of the market, millions are being forced to seek indefinite private rentals. Subsequently, Paragon Bank has reportedly set aside £927 million in loans for buy-to-let investors and entrepreneurs.
“There are a lot more families renting property than there ever was in the past,” commented chief executive Nigel Terrington, acknowledging how difficult it is becoming for UK residents to get on the property ladder.
“There is a bit of a culture in the UK which is our job in life is to grow up, get married and buy a house. That is changing. We don’t have to buy a car or a phone, we can lease them. Housing is the same.”
Paragon also reported impressive half-year profit growth of 45% to hit £83 million, making the bank’s shares the biggest riser on the FTSE 250.
“I am incredibly proud of these results. They reflect the hard work of our people during a challenging period as well as the success of our longstanding strategy to build a technology-enabled specialist banking group,” added Terrington.
“We have delivered record half-year profits and go into the second half of 2021 with strong momentum, healthy new business pipelines and enhanced margins,”
“Our people continue to excel, maintaining both productivity and flexibility as we look to develop options for the future operating model of the Group. We look forward to the second half with strong capital ratios, prudent liquidity and with growing confidence as the UK emerges from the Covid crisis.”