More landlords 'opting for fixed rates' - buy to let mortgages

24 March 2009

More investors are opting for fixed-rate buy to let mortgages, according to a new report.

A publication released as part of Legal & General's Mortgage Purchase Index showed that during the first quarter of 2009, 68 per cent of buy to let borrowers took out a fixed deal.

This was a rise compared to the level seen in the final quarter of 2008, when it stood at 43 per cent.

Director of housing for the lender Stephen Smith noted that the popularity of fixed-rate products has "swung wildly".

"Fixed rates are very much back in favour, partly because lenders have been increasing the margins on their new tracker mortgages," he commented.

In addition, the report found that the average loan-to-value on a buy to let deal was 68 per cent, compared to 58 per cent for residential borrowers.

Meanwhile, smartlandlord.co.uk has advised property investors to avoid lettings agents that charge "substantial" fees.