Paragon Community Housing Group has raised £250m to build 1,000 new houses in Surrey and south-west London, despite its lowest rate of interest for investors.

More than 28 organisation took up Paragon Community Housing Group's bonds at 3.6 per cent rate, with offers topping £700m.

Paragon works in Elmbridge, Richmond and Kingston and hopes to deliver 1,000 new homes by 2019. It already manages 9,000 homes.

John Cudd, chairman of Paragon, said: "Our staff teams and advisers have worked very hard to ensure a successful bond. It is underpinned by the strength of our high quality property portfolio and also the new funding reduces our cost of borrowing.

"This improves Paragon's capacity to develop more new homes in our key operating areas. Issuing the bond also allows Paragon the opportunity to simplify its group structure by amalgamating its subsidiaries, freeing up further borrowing capacity for future development."

The purpose of issuing the bond is to refinance part of Paragon's existing debt and to support development of new homes in Surrey and south-west London.

Dilip Kavi, chief executive, said: "The response of investors to our bond issue was incredibly enthusiastic and reflected the financial strength of Paragon and its clarity of mission in providing core landlord services to current and future customers."

At a meeting at Esher Civic Centre on January 7, councillors discussed Paragon's plans to break direct ties with the council by removing the secured positions for councillors on their board.

This proposal was sent to full council with a recommendation for support.