Shares in Paragon Group, and in other finance companies with an exposure to the buy-to-let market, have been under pressure of late. Paragon was approaching 450p in October and gained 13¾p to 327p by last night after a trading update that indicated progress across the group.
The company is best known as a provider of finance to buy-to-let landlords, but it has had a licence since February 2014 to run a bank, provide car finance, second mortgages and, with the purchase of Five Arrows late last year from the Rothschilds, lending to small businesses to fund asset purchases.
The worries over the buy-to-let business, in which the new loan book grew by 80.6 per cent to £400.9 million year-on-year, were fourfold. There is talk