The banking group will also be acquiring a portfolio of development finance loans for around £226m from a series of special purpose vehicle companies.
Paragon originally commenced residential development finance lending in 2016 and a total of £118m has been advanced, with a pipeline of £130m, and it considers the market to be attractive, with strong long-term growth prospects.
The acquisition will extend the group’s current development finance business and broaden its proposition.
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Titlestone has committed over £2.2bn across more than 330 developments to date, and in the 12 months to June 2018, it advanced £274m of new funds to its developer clients.
The Titlestone team will be combined with Paragon’s existing residential development lending activities under the leadership of Robert Orr, managing director at Titlestone.
Support services will be provided from Paragon’s existing operations.
"This acquisition demonstrates our continued progress in diversifying the group's income streams into specialist lending markets,” said Nigel Terrington, chief executive at Paragon (pictured above).
“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 [has] an outstanding track record and the business is a strong cultural and operational fit with our existing development finance business and the wider group."