Landlords 'preferring variable rates'
More landlords are choosing variable-rate mortgages when purchasing buy-to-let properties, a study has shown.
The report issued by Legal & General, an insurance provider, stated that the proportion of those opting for tracker rates was up to 30% last quarter, a 17 percentage point increase from the previous three-month period.
However, director of housing at the firm Stephen Smith pointed out that "landlords have traditionally preferred variable rates of one sort or another and…the big leap we have seen is from a low starting point".
Variable rates on buy-to-let mortgages were at 60% in the first quarter of last year, Mr Smith added.
The link between mortgage charges and Britain's base rate could be a contributing factor to the trend and the Monetary Policy Committee voted this week to keep the base rate at 0.5% for the eighth month running.
Despite this, Legal & General also found that 3 and 5-year fixed rates have risen considerably, illustrating the belief that Britain's interest rates will increase in the coming years.
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