"The UK development finance market represents an excellent long-term opportunity and Titlestone will enable us to accelerate our growth in this area."
At the same time, Paragon is acquiring a portfolio of development finance loans for around £226 million from a series of special purpose vehicle companies.
Paragon began residential development finance lending in 2016 and to date, a total of £118 million has been advanced with a pipeline of a further £130 million. To date Titlestone has committed over £2.2 billion across more than 330 developments.
In a statement, Paragon said it considers the development finance market to be "particularly attractive, with strong long-term growth prospects" and acquired Titlestone to extend its current development finance business. The transaction is expected to enhance Paragon's post tax profits by a high single-digit percentage in its first full year.
The Titlestone team will be combined with Paragon's existing residential development lending activities under the leadership of Robert Orr, managing director of Titlestone.
Nigel Terrington, chief executive of Paragon Banking Group, said: "This acquisition demonstrates our continued progress in diversifying the Group's income streams into specialist lending markets. The UK development finance market represents an excellent long-term opportunity and Titlestone will enable us to accelerate our growth in this area.
"The management team have an outstanding track record and the business is a strong cultural and operational fit with our existing development finance business and the wider Group."
