Competition driving down mortgage rates

Residential landlords could be among those to benefit from increased competition among mortgage lenders, it has been suggested.

Mortgage Broker Alexander Hall has claimed lower rates can be attributed to growing confidence among lenders.

The comments follow the publication of a Bank of England report, which revealed a decrease in mortgage costs.

According to the study, the average cost of a two-year fixed-rate mortgage deal is now at its lowest level since July 2003.

Andy Pratt, chief operating officer at Alexander Hall, said: "Rates are low and the confidence is back within the lending community.

"Funding is not quite at the right level yet, but they are looking to lend a little bit more so it has become a little bit more competitive. The competition has actually driven the rates slightly lower, rather than the increased level of funding."

However, Mr Pratt claimed that competition is unlikely to increase further as the best deals will continue to come from a handful of lenders, with no new entrants expected in the market.

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