The average fixed buy-to-let rates on two- and five-year products have declined year-on-year, according to Moneyfacts.

Data collected by the firm shows that the average two-year fixed rate on a BTL mortgage product is currently 2.75 per cent, and the average five-year fixed rate is 3.20 per cent.

Looking at fixed BTL rates in 2019, the average two-year fix was 3.07 per cent and the average five-year fix was recorded at 3.56 per cent.

Five years ago, the average two-year fixed BTL rate was 3.50 per cent, and the average five-year was 4.39 per cent.

Moneyfacts finance expert Rachel Springall says: “It is encouraging to see that, despite economic pressures, the BTL market is expected to grow in 2020. Lenders have cut rates on both short-term and long-term deals, so there could be borrowers looking to switch their deal. Cutting down on monthly loan payments may be at the forefront of landlord’s minds considering the mortgage tax relief changes.

“This shake-up may deter potential landlords who feel their profit margins will be tightened, but despite this, optimism for 2020 appears resilient and lenders are clearly working hard to entice prospective borrowers. However, it is hard to tell whether this will wane as the year progresses.

“If landlords are looking at alternative ways to boost their profits, then they could look to set themselves up a limited company, as the tax relief cull applies to private landlords, but they will need to consider any stamp duty costs and the associated taxes for a business, such as corporation tax on profits.”