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Landlords invest mainly in fixed-rate deals

Although recent a study has shown that most buyers are split almost exactly in half when choosing between a variable or fixed-rate mortgages, landlords are not so indecisive, according to research.According to Paragon, as many as 70 per cent of buy-to-let investors have opted for fixed-rate deals, safeguarding themselves against a much anticipated rise in the interest rate.Even though fixed-rate mortgages can be slightly more expensive than variable-rate deals, prudent landlords choose to protect their rate for the long-term. Nigel Terrington of Paragon explains that the knowledge that your mortgage rate is fixed and will not increase means that landlords have to confidence to maintain their investments, even if house prices do start to drop or slow as predicted."If landlords believe that prices will drop by even 20 per cent, they will sit on their hands until prices have stabilised, then take advantage of the lower prices to buy," Mr Terrington told the Independent."Landlords will not sell, they are adamant about that. They are buying for the long term, and they don't have to move in the way that owner-occupiers must occasionally."Furthermore, according to Paragon's files, landlords have shown in the past that they are able to deal with blips in the market. During the 2004/5 drop in the housing market, the mortgage redemption rate actually fell, demonstrating that although landlords not refinancing to add to their portfolio, they certainly weren't selling existing property either.

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