The number of people opting for fixed-rate loans has been rising steadily for the last two years, but this latest rise, over the last six months, is by far the most dramatic.
Since September 2006 fixed-rate mortgages have grown to make up over 60 per cent of the market, up from 48 per cent before the MPC began their recent spate of rate hikes.
John Heron commented: “Our research also 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 are mainly opting for shorter term deals, with the most popular fixed-rate terms being two and three years. Full term fixes were by far the least popular, with only one financial adviser rating them as popular amongst their customers.
Heron said: “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.”
