I can speak to the Canadian context, where many if not most MA programs just take a year (UBC and McGill are the two exceptions I can think of). I'm in my second semester of an MA program, I made PhD applications last fall, and at the moment I've received four offers (all Canadian). You genuinely may have to solicit your BA professors for letters again, and use undergraduate work for your writing sample, but, at least in my limited experience, none of these were deal-breakers (I had to use undergraduate work as my sample when applying to what is generally considered to be our country's best English department, and I still got in). Moreover, some professors at your MA school might still be willing to write for you; they just might need something like a draft of your term paper in advance so they can speak to your writing abilities. Use your judgement: if you've developed a great working relationship with an MA professor in your first semester, then by all means ask. If you feel your BA professors can attest to your strengths in more detail, then ask them again.
The advantages of the one-year program are that if you're really eager to get on with PhD-level work you won't feel like you're spinning your wheels for an extra year, and you won't have to worry about securing second-year funding.