According to research by Mortgage Trust, a record number of borrowers opted for fixed rate loans in April, with 60 per cent of the market made up of this option. The number of people opting for fixed rate loans has risen steadily for the last two years, the research showed.
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The most popular terms were two and three years, with landlords mainly opting for shorter term deals. Full term fixed rates were less popular as borrowers opted for the option to change their plan or remortgage at the end of the term.
John Heron, managing director of the Mortgage Trust, said: “Our research shows that an even higher proportion of landlords have been taking out fixed-rate loans. 78 per cent of landlords have been opting for fixed-rate mortgages in recent months. Landlords are, in the main, shrewd investors, aware of the financial environment in which they are operating. As rates have started to rise, they have sought to ensure that they remain in a financially stable position.
“Landlords clearly have their doubts about short term interest rates, with most expecting a further increase. However, their long term expectations are more optimistic, with the majority of landlords looking to benefit from improved variable rates in two years’ time. Most landlords are astute investors and will position themselves appropriately to ride out any potential disruptions in the financial market.”
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Paul Hunt, head of marketing at Platform, said: “These research findings certainly support the trend in lending that we are currently experiencing. The situation is very straightforward; if you haven’t got competitive short term fixed rates then you won’t get any volume of business in the current environment.”
