24th May 2016 06:44
LONDON (Alliance News) - Paragon Group of Companies PLC on Tuesday reported an 11% increase in first-half pretax profit, as an increase in stamp duty helped to drive a jump in new buy-to-let lending prior to its implementation.
Pretax profit rose to GBP69.5 million in the six months ended March 31, Paragon said in a statement, from GBP62.6 million the corresponding half a year earlier. Paragon increased its interim dividend to 4.3 pence per share from 3.6p.
Net interest income - the difference between interest received from borrowers and the amount paid to savers - rose to GBP109.8 million from GBP97.2 million.
"This has been another outstanding performance from Paragon, with strong profit growth complemented by significant progress in our lending activity and further development in our diversification strategy," Chief Executive Nigel Terrington said in a statement.
New buy-to-let lending shot up by 85% to GBP823.6 million, stimulated by demand ahead of the introduction of the additional stamp duty in the UK from April 1.
"Buy-to-let, whilst maintaining our disciplined approach to credit and pricing, witnessed strong new lending levels influenced in part by the increase in stamp duty, pulling forward some business into the first half of the year," Terrington said.
"Strong tenant demand is set to continue to drive the need for rented property in the UK for the foreseeable future. Whilst there is some uncertainty over the longer term growth prospects in buy-to-let, we expect the tax and regulatory changes to provide relative benefits for the group's specialist lending focus, in particular, the more complex requirements of professional landlords," he said.
By Samuel Agini; [email protected]; @samuelagini
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