News of West Brom building society’s pending 2% rate hike for its 6,700 buy-to-let (BTL) tracker mortgage borrowers, so soon after the customer class action against the Bank of Ireland’s similar move, will make for a nervous time for the BTL tracker market and will leave many landlords searching for an escape route.

Moneyfacts research shows that average fixed rate BTL mortgages have tumbled over the last year, both in rate as well as the number of products to choose from.

In September 2012, the average fixed rate for a BTL was 5.05%. The rate had fallen six months later to 4.65% and continued its downward journey to its current level of 4.33%, almost matching its all-time low of 4.32% in July 2012.

As rates fell, so did the choice of fixed rate BTL mortgages, down from 325 a year ago to 256 today – a fall of 18.5%.

Sylvia Waycot, Editor at Moneyfacts.co.uk, said:

“Renting a property has become the only option for many people, even those that aspire to owning their own home given the difficulties faced by first-time buyers, so the fortunes of the BTL market are also vital to the housing economy.

“As the majority of BTL mortgages are interest-only, any price increase is going to be painful and therefore strongly questioned.

“The number of fixed rate BTL mortgages being marketed seems to be narrowing but this should not cause alarm as long as rates continue to fall.

“This could turn the anguish over BTL tracker increases inadvertently into a golden opportunity for landlords seeking a cheaper option.”

www.moneyfacts.co.uk - The Money Search Engine

Moneyfacts.co.uk is the UK's leading independent provider of personal finance information. For the last 20 years, Moneyfacts' information has been the key driver behind many personal finance decisions, from the Treasury to the high street.

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