Buy-to-let lender Paragon Group hailed a "brave new world" for the housing sector as profits surged to more than £120 million and its workforce reached the 1,000 mark.

The West Midlands group saw underlying profits jump by 18.1 per cent from £103.5 million in 2013 to £122.2 million for the year to September 30, 2014.

And chief executive Nigel Terrington said the Solihull group's boom reflected a housing sector and wider economy which had recovered from the "dark and distant history" of the 2008/09 downturn.

"Last week, we have gone through our 1000th employee, and 99 per cent of that is at Solihull," he said.

"Five years ago, we had 500 people and today we have just gone through 1,000. We are still growing, and an 18 per cent increase in profits is a very strong number. We think this is an outstanding set of results."

Mr Terrington said the new Paragon Bank had eaten into group profits although a statement to the City revealed it had amassed £60.1 million of deposits by the year end after launching retail deposit taking activities in June.

He added: "The bank during this year has cost us money, setting it up costs money. The bank lost £6.4 million otherwise profits would have been even higher. It is a start-up, an investment for the future.

"The marketplace is very buoyant, the buy-to-let market in 2013 stood at £21 billion across the UK as a whole. During the course of this year, it has grown further.

"We expect it to grow to £26 billion by the end of this year. A lot of it is being driven by a significant increase in demand for rents."

He said the recession had "become a dark and distant part of history, although we will never forget the lessons but we are now into a brave new world".

"We are very ambitious, we have got 60 unfilled vacancies, from sales to customer service to the bank. When you are trying to hire a lot of people at once, it can be a bit of a challenge. We can never be complacent," he said.

"The economy has improved and I would say that improves confidence generally. Buy-to-let is growing because rental demand has been increasing, from government policy to the student population, to immigration flows to the Mortgage Market Review.

"But there is more than light at the end of the tunnel, there is blazing sunshine."