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TODAY'S OTHER NEWS

Buy-to-let investors fixing for longer

There has been a sharp decline in the number of buy-to-let investors taking out two-year fixed rates.

Two-year fixed rates made up just 43% of new lending in the third quarter, down from 54% one year earlier.

More landlords are fixing for longer periods, with three and five-year rates increasing their market share to 9%.

The latest Buy to Let Mortgage Costs Index from Mortgages for Business also shows a rise in the number of products with no lender arrangement fee.

Some 17% of products were offered without lender arrangement fees, up from 13% in the previous quarter.

The number of fee-free deals is rising as lenders tried to find ways to compete without reducing rates which are already at an all-time low.

The number of products with percentage-based fees fell from 40% to 37% over the quarter, while flat fees fell slightly 47% to 46%.

The impact of charges, including arrangement, valuation and legal costs, continues to decline, adding 0.48% to the headline rate, down from 0.67% in the first quarter of 2013, when the index was first launched.

This downward trend can now be seen even in high LTV products which added 0.90% onto the headline rate in 2014 but just 0.67% in Q3 this year.

Simon Whittaker, finance director at Mortgages for Business said: “The recent falls in swap rates, almost back to levels similar to the start of the year, have helped lenders trim prices.”

He said lenders are having to be ever more creative to find the balance between maintaining their margins and offering competitive products.

Whittaker added: “When looking at the market and the wider economy, the balance seems to have tilted towards there being no increase in bank rate for quite a few months yet.”

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