Mortgage lending remained stable last month, while complex buy-to-let borrowing is on the up, according to the most recent banking figures.
Mortgage Lending Remains Stable, While Complex Buy-to-Let is on the Up
The latest high street banking data from UK Finance shows that consumer credit growth was 1.9% in June, compared with 2.1% in the previous month.
Gross mortgage borrowing totalled £13 billion last month, while net mortgage borrowing was 2.6% higher than in June last year.
Eric Leenders, the Head of Personal at UK Finance, comments: “June saw consumer borrowing from high street banks, which accounts for 45% of the overall credit market, maintain its slower pace, as rising inflation put pressure on household incomes. Housing activity remained relatively stable, with over 74,000 mortgages approved last month, while businesses continue to build their reserves, borrowing less and increasing their deposits at an annual rate of 6.1%.”
Meanwhile, the parent company of Paragon Mortgages – the Paragon Group of Companies – has today released its third quarter (Q3) trading update for the nine months to 30th June 2017.
The Group reported total lending and investment for the first three quarters of the year of £1.4 billion, with buy-to-let mortgage lending comprising £1 billion of the total.
Buy-to-let lending between March and June 2017 was particularly strong, at £458m, compared to £166m in Q3 2016, which followed the increase in Stamp Duty on additional properties.
Paragon’s healthy application flows reflect market share gains as a result of increasing demand from more complex and professional customers. The proportion of these customers in the pipeline rose to 70% during the quarter, up from 62% at the start of the year. At the end of the quarter, the pipeline of new buy-to-let business totaled £700m.
The Group also made good progress with its diversification strategy, growing new asset finance and other specialist lending by 66% to £330m in the nine months to the end of June.
The Managing Director of Paragon Mortgages, John Heron, says: “The buy-to-let market has been the subject of repeated fiscal and regulatory intervention in recent times. This is changing the nature of buy-to-let, and what we are seeing emerge is a more specialist market with a marked increase in more complex, professional landlord business. This is very well aligned with Paragon’s experience and capability, as underlined by today’s strong trading figures and by our early implementation of phase two of the PRA’s regulatory requirements for buy-to-let.”