Consumer service Which? says it anticipates landlords choosing short term mortgages in the coming year, rather than five year options.

The service – which also operates a mortgage advice facility – says a year ago it predicted that landlords would lock in shorter-term mortgages in 2020, with uncertainty around Brexit and the future profitability of buy to let causing investors to be risk averse. 

Now it says 2021 will be a repeat.

“With the added complexities around Covid-19, the future of the eviction process and a lack of clarity around renting rules after Brexit, it may be more of the same in 2021, with landlords keeping their options open by taking out two-year fixes rather than longer-term deals” it suggests.

Which? says buy to let mortgage rates have risen slightly since the start of the pandemic, from 3.0 per cent on average in March to 3.09 per cent in December, but there are signs that costs are coming down again. 

A handful of lenders, including Accord and Coventry Building Society, reduced their rates in December, and more may follow in January. 

“It’s likely that we’ll see relatively small rate cuts rather than major sales in the early part of 2021, and lenders may look to entice landlords with fee-free and cashback incentives rather than headline-grabbing rates” says the service.