Positive Outlook for UK Property Market as Investors Embrace Sustainable Investments
Published by Magnate Assets on
Jun 13, 2023
In an exciting development for the UK property market, investors are increasingly recognizing its positive potential and actively investing in new properties that meet energy performance criteria, leading to a reduced carbon footprint. Paragon Bank, one of the leading lenders in the rental space, has reported an impressive 19 percent increase in buy-to-let lending during the first half of its financial year. With a total lending of £1.02 billion, the company's shareholders have been informed about this encouraging trend.
Specialist Lending Focus:
A remarkable 99 percent of Paragon Bank's buy-to-let lending during this period was classified as specialist, indicating a strong focus on the complex segment of the market. Notably, there was significant growth in lending against properties that boasted an Energy Performance Certificate (EPC) rating ranging from A to C. This demonstrates a growing interest in green buy-to-let products, with lending in this category increasing by an impressive 30.1 percent to reach £457.8 million.
Promising Future Prospects:
Although Paragon Bank's buy-to-let pipeline reduced to £811 million at the end of the period, compared to £1.34 billion in the previous year, this decline can largely be attributed to disruptions in application flows following the post-Truss mini-budget period. However, the bank is optimistic about the future as recent application flows indicate a strong rebound, with the pipeline showing a nearly 20 percent increase.
Richard Rowntree, the Managing Director of Mortgages at Paragon Bank, expressed his delight in the bank's performance and highlighted the ongoing progress in both financial and operational aspects. He emphasized the strong underlying demand for buy-to-let investment by portfolio landlords, which is reflected in the surge of application flows post-mini-budget.
Financial Success and Sustainable Investments:
Paragon Bank's underlying profits for the six months ending on March 31 have surged by an impressive 22.2 percent to reach £128.9 million compared to the same period last year. This overall success can be attributed to the growth in total new lending across the bank's divisions, which increased by 6.9 percent during the first half, amounting to £1.59 billion. Consequently, the total loan book experienced a 4.6 percent year-on-year growth, reaching an impressive £14.6 billion.
With investors embracing the positive outlook of the UK property market, there is a renewed focus on sustainability and reducing carbon footprints. Paragon Bank's encouraging financial results, coupled with their emphasis on specialist lending and green buy-to-let products, exemplify this trend. As the demand for sustainable investments in the property market continues to rise, it is expected that both investors and the environment will reap long-term benefits, leading to a brighter and greener future for the UK property sector.