Improved gearing should help the buy-to-let sector remain healthy in the long run, according to Paragon.

The low level of arrears on buy-to-let mortgages means the sector stands to gain from the current credit squeeze, Paragon suggested.
“Activity in the securitisation and whole loan markets has been muted over the summer and, when investors return in force, credit quality will be top of their agenda. Given the superior, indeed exemplary, credit profile of buy-to-let, we can expect them to favour paper backed by low risk mortgage assets”, said Neil Terrington of Paragon.

Savills has also suggested that the credit crunch could prove beneficial for the market, reducing the risk of the sector overheating.