Landlords opt for fixed rate
The latest Landlord Profile Tracking Index found that the average fixed rate during the first quarter of 2013 was 4.48% compared with 4.67% in the previous quarter.
The Index also found that average LTVs continued to rise as lenders offered higher levels of lending.
Terraced houses and flats proved most popular with landlords and properties in Liverpool, Bristol and Llandudno all provided above average yields.
Andy Young, chief executive of TBMC, said: “The buy-to-let mortgage market has got off to a good start in 2013 with a wide range of products available to meet the diverse needs of the UK’s landlords.
“Factors such as high tenant demand and flat house prices are providing an ideal environment for residential property investors looking to expand their portfolios, and excellent opportunities for brokers with buy-to-let clients.
“Although there is still scope for further improvement in the availability of finance lenders are showing a keener appetite to lend and some very competitively priced products are currently on offer.
“This trend in pricing has meant that fixed rates and variable rates have been moving closer together over the last 12 months, and for the first time the average fixed rate dipped below the average variable rate.
“Increased competition has also influenced product design and some lenders are offering low headline rates aimed at specific segments of the market in order to attract new business and reach lending targets.”
Unsurprisingly as the cost of fixed rate buy-to-let mortgages has fallen more landlords are choosing these products over less predictable variable rates.
In Q1 2013 48% of applications received by TBMC were for fixed rates, up from 41% in the previous quarter.