Paragon reports rise in mortgage lending as housing boom continues

Paragon Banking reported a rise in mortgage lending as the UK house buying boom continued.

The company on Friday said year-to-date new business volumes exceeded 2020 levels, supported by a strong quarter's trading that generated new advances of £485.4m in the mortgages division and a further £310.6m in commercial lending, representing the group's busiest new advances quarter for more than a decade.

Britain’s housing market has experienced a boom as buyers looked to take advantage of the stamp duty holiday introduced by the government in response to the Covid-19 pandemic.

New lending for the quarter to June 2021 totalled £796m, compared to £379.3m and £610.1m in 2019.

“The strong trading performance for the latest quarter has supported our continued expectation for volumes in the mortgages division to be above £1.5bn and for the commercial lending division to generate advances of over £900m for the year to September 2021,” Paragon said.

“Our costs guidance remains unchanged and given further progress during the quarter we still expect the group's net interest margin for the year to exceed 235 basis points.”