But sentiment grows around trackers
A vast majority, or more than three-quarters, of landlords expect to opt for a fixed rate deal when it is time for them to remortgage, the latest survey from buy-to-let specialist Landbay has revealed.
However, while the majority of landlords prefer the certainty of a fixed rate, Landbay said the sentiment has shifted on tracker mortgages, with almost one in six (17%) respondents stating they would consider a variable tracker rate and 6% expressing they might revert to a standard variable rate (SVR).
In Landbay’s previous survey undertaken last August, a month before the mini budget, no-one said they would take a tracker.
According to the lender, the rise in landlords considering trackers is due to economic uncertainty as some respondents believe rates will come down in the next year or two and do not want to commit to a long-term product today.
Landbay noted that while five-year fixed rates were still the most popular option among landlords at 46%, it has fallen quite significantly from 68% in August.
Meanwhile, shorter-term fixes have grown in popularity, with almost a quarter, or 24%, of landlords eyeing up two- or three-year fixed rate terms, compared to 13% in the previous survey.
Popularity in longer-term fixes, such as seven- or 10-year deals was similar in the two surveys, marginally rising from 7% to 8% of landlords.
Last month, Landbay launched a range of two-year discounted buy-to-let trackers with no early repayment charges.
“When we talk about this record year of mortgage maturity, much of the conversation is focused on first-time buyers or traditional households,” Paul Brett (pictured), managing director of intermediaries at Landbay, remarked. “It’s important we remember the many landlords who are set to remortgage too, and, judging by our latest data, fixes still look like the preferred product.
“However, it’s interesting to see how landlords’ views of their remortgaging options have changed since September’s mini budget. Fewer landlords are considering five-year fixed rates, and more are looking at two-year fixes.
“There was a considerable rise in landlords thinking of taking a tracker mortgage, up from zero to 17%. A tracker mortgage is a safer option for some who don’t want to commit to a fixed rate. The advantage with trackers is there are no early repayment charges so borrowers can move to a fixed product if rates come down later in the year.”
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