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The fixed rates on five-year buy-to-let mortgages have returned to record lows, with the average 3.43 per cent rate as low as it was in October 2017.

Figures from Moneyfacts showed rates have fallen back on these products, where average rates were as high as 3.77 per cent in March last year.

Charlotte Nelson, finance expert at Moneyfacts, said a substantial chunk of borrowers were likely to be remortgaging in the coming months because so many people rushed to buy in March 2016 ahead of the introduction of the buy-to-let stamp duty surcharge.

She said: “In anticipation of this, lenders have started to compete in the five-year fixed rate market to vie for these potential borrowers’ custom. This has seen the average five-year fixed rate fall to the joint lowest on records.

“Five-year fixed rates are likely to be a popular choice among landlords, as the stress-test that is applied for two-year fixed rates does not apply to the five-year deals. This could well be one of the reasons why BTL lenders have focused competition within this market.”

Ms Nelson said property could still be an attractive investment buy urged landlords to seek financial advice.

In January the average five-year fixed rate for a buy-to-let mortgage was 3.45 per cent.

Andy Craddock, from Mortgageforce in Worcester, said five-year fixed rates were popular with buy-to-let customers.

He said: “They are worried about Brexit and want to fix for as long as possible.”

He added that Coventry Building Society had a very competitive ten-year rate, at 2.95 per cent for 65pc LTV. “If you have the loan-to-value then it’s fab,” he said, “especially with rate rises expected from March.”

Source: FT Adviser

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