Increasing numbers of landlords are favouring the option of going for shorter-term fixed rate mortgage deals. The attraction is down to the low charges and any forecasts of increases on the Bank of England rate are not considered for the near future.

A specialist mortgage broker reveals the upsurge from their recent survey and that in the last three months of last year that those choosing two year fixed rates had almost doubled since the beginning of 2014. From the first quarter of 2014, 12% of investors had favoured the two year fixed rate whereas by the end of the year it stood at 23%.

Unsurprisingly there was a drop in the numbers of landlords that went for the longer term fixed rates over three years dropping from 21% down to 15%.  

However those numbers of investors who opted for a five year plan have not dropped so significantly from 34% in the first three months of 2014 down to 31%. The survey also revealed that less than one in ten landlords (8%) would choose a five year fixed rate if it was offered to them.  

David Whittaker, managing director of the mortgage broker, said: “Tempted by cheap rates, landlords are deciding to take their chances with a shorter term deal.

“It’s true that these ultra-competitive mortgage rates will probably continue for some time – as the financial world increasingly predicts virtually zero inflation in the UK and Eurozone, plus a cooling rate of economic growth. That doesn’t mean there’s no room for caution. Even in such an exceptional situation, rates are still expected to rise in due time. However, landlords now seem willing to take the chance that won’t happen for at least a couple of years.

 “However, we maintain our recommendation to fix for longer, particularly where the pricing difference between three and five year fixed rates is narrow.”