No fewer than 93 per cent of landlords financing buy to let property chose a fixed rate mortgage in the second quarter of this year according to respected broker Mortgages for Business.
Five year fixed rates in particular, were the most popular choice for landlords transacting via the company, with 69 per cent of landlords choosing this option.
“We’ve been recommending five year fixed rates for a long time. At the moment there’s very little difference in pricing between fixed and variable rate products. In today’s uncertain economic climate, particularly the road crash Brexit negotiations, fixing makes a lot of sense, especially as the average price is just 3.52 per cent. Why wouldn’t landlords make them a part of their business strategy?” says the chief executive of Mortgages for Business, David Whittaker.
His company also reports that an increasing number of lenders are offering products free from arrangement fees.
In the second quarter of this year a fifth of all products had no fee attached, up from just 14 per cent nine months ago.
Other incentives were also on the increase, including cash back, free valuations and free legals for landlords remortgaging property.
The average flat arrangement fee - where it exists - did rise, however, to £1,389.
Mortgage for Business adds that the number of lenders offering products to landlords borrowing via limited companies increased by three during the last quarter, and half of all buy to let lenders now offer mortgages to corporates.
At 8.6 per cent, HMOs produced the highest gross annual yields of any residential lettings property type.