Paragon Group has released its results for the year ending 30 September 2015, reporting that buy-to-let lending has increased by over 100% to £1.33 billion when compared to 2014.
The Group also reports a 10.2% increase in underlying profit for the period, reaching £134.7 million (2014: £122.2 million).
The pipeline of new applications further demonstrated the growth in business and at 30 September stood at £713.7 million – up 72.1% compared with the same period last year (2014: £414.8 million).
John Heron, Director of Mortgages, said: “It has been a fantastic year for the Group overall and with our acquisition of Five Arrows Leasing through Paragon Bank, there will be more exciting opportunities to come.”
Paragon's news comes as buy-to-let investors were dealt another blow in yesterday's spending review.
As well as budgeting for the government's housebuilding programme, the chancellor announced that from April 2016 purchasers of buy-to-let properties or second homes are to be hit with a 3% increase in Stamp Duty Land Tax.
The money raised by the initiative – predicted to be around £1 billion by 2021 – will be reinvested into new homes and the extension of the Right to Buy scheme.
Combined with the tax changes announced in July's Summer Budget, this new charge is expected to deter prospective buy-to-let investors over the next few years and reduce market competition for first-time buyers.
“The extra stamp duty on buy to lets will exacerbate an already serious shortage of properties in many areas reducing choice and driving up rents,” says Alan Ward, Chairman of the Residential Landlords Association.
“The government should be encouraging landlords to invest, not doing everything they can to discourage them.”
Richard Lambert, Chief Executive of the National Landlords Association, shares a similar sentiment.
“The Chancellor’s political intention is crystal clear; he wants to choke off future investment in private properties to rent,” he says.
“The exemption for corporate investment makes this effectively an attack on the small private landlords who responded to the housing crisis by putting their own money into providing homes by the party that they put their faith in at the election.”
“If it’s the Chancellor’s intention to completely eradicate buy to let in the UK then it’s a mystery to us why he doesn’t just come out and say so.”