Paragon Group saw a dramatic fall in its buy-to-let lending in the final quarter of 2016.
It totalled £171.3m in the last three months of the year, compared to £400.9 in the first quarter.
However, lending is picking up and it expects to lend £185.2m in the first quarter of 2017.
In a trading statement, the group said: “Throughout the final months of 2016 the buy-to-let market saw lenders tightening criteria ahead of the PRA underwriting changes which took full effect on 1 January 2017. Paragon had implemented the majority of these changes a year ago, in January 2016, and, as market criteria tightened during the last quarter, the Group’s pipeline continued to grow from its low point in the summer. I
t is too early to determine the full extent of the PRA changes on the market, and the further changes due later in the year, however the strong pipeline …positions the Group to achieve its anticipated new business volumes for the year.”
Underlying operating profits for the quarter of £33.1 million were in line with management’s expectations.
Nigel Terrington, Paragon Group’s chief executive, said: “We have made a strong start to a year that will see the group continue its transition to a lending and operational model that is orientated around Paragon Bank.
“The lending growth we have seen in asset finance is encouraging and reflects the increasing diversification of the group. Lending across all divisions and the strong growth in the buy-to-let pipeline bodes well for the year as a whole.”