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Last Updated: Saturday, 23 June 2007, 10:00 GMT 11:00 UK
Have Your Say: Buy-to-let
To let signs

The tax relief offered to buy-to-let owners should be removed, says the president of the Chartered Institute of Housing (CIH).

Paul Diggory has called on the government to tackle the "runaway" market which he says is contributing to problems faced by first-time buyers.

He says buy-to-let owners have a financial advantage over those trying to buy their first home, and push house prices even higher.

We asked for your comments, a selection of which are below. This debate is now closed.


Listen to yourselves. We have become a nation of greedy, self-centred, something-for-nothing pension and house-price obsessives. And if you haven't got it, you squeal because someone else has. Being young, healthy and free with loving family and friends beats all the pension nonsense hands down.
F Gray, Laide

I am a buy-to-let landlord but can see no logic at all in mortgage tax relief. It allows higher prices to be afforded and provides an unfair advantage over first-time buyers. Landlords do not qualify for business capital gains taper relief so why should they get business tax relief on loan interest?
Michael Hunt, Hungerford

Brilliant idea! Tax to the hilt the very people who are providing a solution to those that cannot afford to buy, so there will be an even worse housing crisis! Sheer genius!
Rob Cargill, London

To suggest that these buy-to-let landlords are somehow putting themselves out to provide a public service is just ridiculous
Brian, Glasgow
I would be quite happy if some of the buy-to-let landlords had to sell up if they were taxed. Profiting from property for commercial use is one thing, profiting from what is a basic right of society for everyone to have a roof over their heads is just obscene. To suggest that these buy-to-let landlords are somehow putting themselves out to provide a public service is just ridiculous.
Brian, Glasgow

I own one property which I let out. If tax relief on mortgage interest was abolished, the only thing this would achieve would be to push up rents by about 40% - hardly good news for tenants.
Mr M, London

Buy-to-let is just the same as if a small number of speculators bought up all the food, and then when people were hungry enough, sold it back to them at inflated prices. The practise of BTL should be heavily discouraged, it's the main cause of the misery of high house prices.
Tomo Redfern, London

Believe me, being a landlord creates just as many headaches as any other self-employed job
Helen McGinty, Birmingham
Buying houses to rent is my job. I am a self-employed landlord. I don't have another job, this is what I do to earn a living. For those of you who think most of us are making a fortune out of rental properties, you are sadly wrong; not to mention all the hassle we have with tenants not paying, trashing our properties, repair work, etc. Believe me, being a landlord creates just as many headaches as any other self-employed job ever could, and at the end of it, when it's time to sell the property, the chancellor makes a small fortune in capital gains tax. So, I would suggest you take that in to consideration before you start saying we should be taxed even more.
Helen McGinty, Birmingham

Buy-to let landlords provide my family with a rented home. Where will we live if buy-to-let ceases to be a wise investment? Surely the UK is still a "free" land where we are not forced to buy property to live in a house, or does the government wish to own property again. I think not.
Steven Hunt, Ashford

I suggest if you can't afford to buy and you're in the position of having to pay extortionate rents to private landlords; join the social housing list and put pressure on them to find you somewhere. The people I know who rent socially pay about 1/4 of the price of private rents and they have pretty good place.
David, London

Ninety per cent of those demanding the change in the law are people who wish they were in the position to own a buy-to-let property themselves . There is no empirical evidence that landlords are crowding out the property market and if anything, demand for rented accommodation is, more often than not, helping to regenerate parts of towns and cities in this country that were totally forgotten.
Juan Carlos Grinan, Walton on Thames

Give mortgage interest relief to all or none
P Negi, London
All we first-time-buyers ask for is an even field. Give mortgage interest relief to all or none. Why the discrimination? If BTL left the market, the supply would stay the same and prices would come down - people like us would finally be able to buy rather than pay some guy's pension. All we ask for is equality on the mortgage interest relief issue.
P Negi, London

One way of reducing the number of empty properties is to slash the time taken for planning permission and building regulations approval - in our area the whole process can take six months (it is wise to wait for planning permission before applying for building regulations). If you buy a house that needs total renovation and extension, it can sit empty for six months before work can start. This often happens as more people now rent for a few months to break the house purchase chain and to enable them to take on a "project".
Phil Ainsworth, St Albans

The BTL investors are a similar breed to those who drove the dot-com bandwagon over the cliff and to those Lloyds "Names" who lost their shirts a few years back. They believe that their investment is so sound that they cannot possibly lose. However, in reality, they are gambling money (often borrowed money that they cannot afford to lose) on a short priced favourite.
Paul, Devon

We've made the decision not to sell off our farm cottages, instead we have kept them and let them out for shorthold tenants. We have been offered silly money to sell the houses, but know that they would end up becoming second homes, which would remove even more properties from the housing market. By keeping them as letting property, we are at least giving a chance to locals to live in the local area, where they are usually pushed out by the second home market.
Jason Borthwick, Burnham Deepdale, Norfolk

Southampton is really suffering from this phenomenon
Kathy Emmott, Southampton
Not only is buy-to-let pushing up prices, it is also creating streets full of rented properties where no-one cares about the gardens, the rubbish, the neighbours etc and all sense of community is lost as almost all the people living there are entirely transient. I live in a street like that and it is really depressing as I did save all my money to buy my house and all the landlords think about is making cash from the properties. It's not just my street - Southampton is really suffering from this phenomenon. Something must be done to halt this - raising the tax would be a good start.
Kathy Emmott, Southampton

All these people complaining about landlord's. I suggest they try letting a property out. Letting law heavily favours the tenant. Letting property is not something to be done on a whim - a lot of responsibilities come with it. That's why a landlord is entitled to make some money in the same way as any other business.
Jim, Scunthorpe

If you want to increase supply - do away with capital gains tax for selling. Many landlords can't afford to sell since there isn't enough equity in their properties to pay the taxman.
Colin Gordon, Edinburgh

So far I have been outbid twice by BTL landlords
John Walters, Halifax
I am a first time buyer looking to get a foot on the ladder and so far I have been outbid twice by BTL landlords. How am I ever going to buy when BLT'ers are pricing us out of the market going above asking prices for property? These houses then stay empty for months.
John Walters, Halifax

Once upon a time a BTL mortgage was considered as a commercial loan, finance was relatively hard to come by, and the interest rates were considerably higher than for a normal home loan. Now lenders are competing to give money away cheaply for BTL mortgages without the traditional income multiples which apply (especially) to first-time buyers. These developments have given the BTL investors far too big an advantage and have inflated the house market unnaturally.
Richard Rogers, Cambourne

Buy-to-let landlords are always wanting to make a profit at the expense of those of us wanting to buy our first home! I think something should be done soon! Like many, both my husband and I work full time but cannot afford a mortgage, let alone raising the money for a deposit, when we are ourselves funding these buy-to-let landlords!
Tracey, Maidstone

I lost a lot of money on buy-to-let and have losses which I cannot offset against other income. These losses are real and are run up on credit cards for which I have to repay out of taxed money. To disallow interest from tax calculations would be to ignore the economic reality of the venture and would be a huge mistake.
Arnie, Edinburgh

Perhaps Gordon Brown can provide some tax relief to landlords who sell up?
Roger, London
I want to get out of the housing market. However, if I sell up I will end up with a big capital gains tax bill and this is a disincentive to sell. Perhaps Gordon Brown can provide some tax relief to landlords who sell up? Business owners who do sell up get relief but not residential landlords.
Roger, London

A fair solution would be to enable first-time buyers to pay interest on their mortgages from their pre-tax salary. Introducing a new tax for buy-to-let landlords won't help first-time buyers a bit. It is just a trick for getting more tax.
Nenad, London

I hear pension, pension, pension. Property has always been a safe investment but when you get into the situation we are in with massively over-inflated prices we could be in for another pensions crash. We hear about how we've had 10 years of growth but it's all based on debt.
Danny, Gravesend

Most BTL landlords I have come across do not pay any tax whatsoever. They remortgaged their properties when prices went up and used the money as new deposits to buy more properties. If they were honest with the taxman most would not be able to build up a portfolio that fast.
John, London

The biggest issue here is about housing being more affordable and not building more affordable housing. I think the best approach would be for all new-build properties with two bedrooms or under (first-time buyer properties) to be sold only for primary occupancy and not to investors. The new build house we are renting would be perfect for us to buy, we pay 600 pcm rent although the current market value of the house would mean we couldn't afford to actually purchase it!
John Moore, Northampton

I have nothing against students, but their landlords don't seem to care if the gardens look scruffy
Ann Gowland, Farnham
I have lived in a close of 24 terraced houses for over 20 years. During this time, 12 have come on the market, of which nine have been bought by landlords to let to students, and only three have been bought by families. I have nothing against students, but their landlords don't seem to care if the gardens look scruffy with overflowing wheelie bins left out on the pavement. I think buy-to-let landlords should not be exempt from tax on mortgage interest. Also I think they should pay council tax. I hope Gordon Brown will address the problem. Rents should be controlled, and tenants should be given more security of tenure.
Ann Gowland, Farnham

If tax relief on interest payments will be scrapped, will capital gains tax also be scrapped?!
Paul, Manchester

People should be allowed to get tax relief on tenancy income on one property, but perhaps it should be abolished for any subsequent rental property after the first one. This should slow the market slightly by pushing out some existing or prospective multiple buy-to-letters.
Lee McCarthy, Rainham

The solution is really very simple. Restore the rights of sitting tenants. Mortgage companies will only lend so cheaply on buy-to-let because they see no risk - they can repossess at any time and the tenant cannot stop them. Meanwhile it is impossible to get anything other than a shorthold tenancy, so tenants have no security. Put back secured tenancies and the market will calm itself down quickly and the lunacy will end.
Silas Denyer, London

I was under the delusion that left-wing jealousy was a thing of the past in the UK
Colin, Dubai
I have never read so much rubbish. Any business (and buy-to-let is a business) is allowed to offset costs against income. I was under the delusion that left-wing jealousy was a thing of the past in the UK. Clearly it isn't.
Colin, Dubai

My wife and I have been buy-to-let landlords for 3 and a half years. We have never made any money from our properties - in fact, the running total of our losses over that period stands at over 27,000. We are currently losing around 700 a month. Because the market is so saturated, we haven't made any capital gain, either - our properties are now worth less than when we bought them. An awful lot of people have been seduced into the idea of buy-to-let as a great money making scheme - it just isn't. Our agent in Manchester, where we have one of our flats, told us last year that there were about 25,000 properties available for rent, chasing approximately half that number of prospective tenants - and that's why properties stay empty.
Tony Jefferson, Oxford

Though I do not have a buy-to-let property at the moment, I do not think that the government should consider any tax rules to discourage buy-to-let investors. I know many investors work very hard to put down a very large deposit. Why should people be penalised when they work hard for it? Many have no confidence in their future pension income so if they have taken steps to build up their property portfolio, leave the investors alone. Comment about investors leaving their properties empty is exaggerated. Who wants to be paying a hefty mortgage and leaving properties empty?
Jan, London

We will never lose our tax relief because it would be lost votes for the government
Rupert, Gerrards Cross
This would be a disaster for us landlords. At the moment yields are only 6% on my portfolio. If I lost all my tax relief I would have to sell my portfolio because there would be no financial benefit in keeping it. Even worse, I would then have to pay huge capital gains tax on my profits. It's not my problem that youngsters today can't afford anything. We will never lose our tax relief because it would be lost votes for the government.
Rupert, Gerrards Cross

This is typical of the way we always look for someone to blame. I agree with the view that people who buy property and then leave it empty should not benefit, but they can only offset the interest against income from the property. Good landlords rent at affordable market rates. The real issue is that there is no local authorities building social housing and of course Thatcher gave you all the right to buy. How many people bought up the social housing stock, and have reaped a healthy profit. That is the real issue. Stop the blame culture and address the issue, we must build more houses.
Kris Hurman, Ashford

This argument would not have come about if it was not for the laughable inflation targets set by Brown leading to ludicrously low interest rates, and secondly the supply side constraints on house building. If we build more houses and set interest rates against a basket of measures rather than CPI, the price of houses will fall and many highly speculative and amateur BTL landlords will be forced to sell uneconomic so-called investments.
Steven Farrall, Ipswich

We need a partnership between local councils and buy-to-let money. The councils would get the finance to build social housing. The buy-to-let people would benefit from the councils' expertise and a greater spread of properties. There would also be more homes for renting and for buying. Finally, we need to halt the forced sale of council houses at knock down prices, which has already done too much harm.
Chris Grey, Guildford

Their pension is our homelessness. All property owners exploit a monopoly position - a monopoly in something everyone needs just to be able to have a settled home somewhere and find work. Their capital gains, like those of any owner, are caused by the relative popularity of a location - something their investment itself does nothing to achieve. Their mortgages, like all mortgages, are the core of our money supply and the root of inflation. This isn't about buy-to-let per se, but about our relationship to land as a society. Land Value Tax would encourage such people to put their savings into genuinely wealth-producing assets, not zero sum gains that exclude others from life's essentials.
Jock, Oxford

Why should the tenant contribute to their pensions?
Patricia Booth, Canterbury
I think buy-to-let landlords have become very greedy. As most of us know, landlords can offset much of their expenditure against tax. So why should the tenant contribute to their pensions? There are plenty of other avenues for investment. Also, the greedy landlords make the tenant liable for the council tax.
Patricia Booth, Canterbury

The reason for the buy-to-let boom is the ridiculous state pension, the uncertainty of company pensions, the ability of the chancellor to destroy private pensions and the risks as shown by the Equitable Life debacle. All these things can be solved by introducing a decent state pension.
John, France

The buy-to-let bubble will eventually take down the whole housing market. In reading all of the comments below it is clear that interest rate rises are already starting to pinch. More rate rises to come? Most likely, and when the landlords start to see that they cannot even break even there will be a stampede for the exits and prices will drop like a stone. This is a disaster in the making. And after that there will no doubt be affordable housing again for the first-time buyers but not before many have lost their shirts.
Nicky, Southampton

The BTL industry in the UK is needed, especially in large, high-density urban areas. Getting rid of tax relief is a half-baked idea - it would be insignificant. It is a highly complex problem to provide enough homes for all and sundry in the south east at the right price. Everybody should have a home in a civilised society but don't blame BTL. Blame Gordon Brown and co - they run the country and they planned wrong.
Joe Regan, London

Maybe if currently insecure pensions were restored and protected again people wouldn't need to invest in property as an alternative. My own employers, a blue chip multinational, have followed the market and ended the final salary pension scheme, cutting prospective pensions in half despite making record profits. Buy-to-let is a symptom of this more fundamental disease and taxing such landlords further will only add to the burden of future taxpayers who will have to meet the cost of today's failed pensions. Deal with the real issue first please and put pensions before shareholder and board greed.
Stephen, Glasgow

Interest relief serves to reduce the rents to millions of tenants... so this is another spun-up non-story.
Hugh Burnett, London

If there is ever a price crash, a lot of tenants will suffer as their rented accommodation is sold from under them
Nick, Horncastle
I had to move twice in three years due to buy-to-let landlord greed. First, making the house intolerable by cramming too many people in, then selling the house from under us to cash in their investment. If there is ever a price crash, a lot of tenants will suffer as their rented accommodation is sold from under them in the scramble to sell. We desperately need a stock of rented accommodation divorced from speculation, to serve the same purpose as council housing used to do.
Nick, Horncastle

In the past couple of years interest rates have increased dramatically but rents have been stagnant. As an average investor I am making a loss on my properties. There is already a charge on empty property (council tax) and I would be mad to voluntarily have a property empty, bringing in no income. Unfortunately, sometimes it is difficult to find tenants when you need them. The "tax-relief" on buy-to-let mortgages is a complete nonsense. The mortgage interest (at much higher rates than an a standard mortgage) is one of the costs that needs to be offset against the income.
Colin Allinson, Munich

I assume that those complaining about the supposed unfair tax advantages for landlords will be happy to pay Capital Gains Tax on any gains they make on their own homes. After all, why should people who have to live in rented houses subsidise potentially "fat cat" home owners? Yes, the argument is ridiculous but before envy and claims of unfairness are allowed to destroy a vital source of housing for people on benefits, students, older people without pensions and so on, please can we get our facts straight? I am amazed that the NLA spokesman did not make this point.
John Bird, Billericay

If tax relief is removed, I, like many others, will be forced to sell up
Christine Wharton, Cornwall
Would a solution for first-time buyers be to give them income tax relief on their first mortgage? Like many, I went into buy-to-let because I didn't have a pension. I remortgaged my own home to build up a small portfolio of properties that provide tenants with comfortable homes - though letting law heavily favours them over landlords. But the latest interest rate rises mean rents barely cover mortgage repayments, let alone insurance and other costs. If tax relief is removed, I, like many others, will be forced to sell up. If a mass sell-off leads to a housing crash, I shall be back to square one: no pension!
Christine Wharton, Cornwall

It is not just first-time buyers who are being squeezed out by those looking for investments but also those who need to downsize or even move on the same level. Short-term tenants and second home owners do not contribute towards the community either economically or socially. Investment property owners always seem to have the necessary cash to outbid any owner-occupier buyer in the medium to low-priced property categories particularly in the nicer parts of this town.
Julia, Eastbourne

What a load of rubbish is spoken about investors buying properties and taking them from first-time buyers. The comments I hear most often are first-time buyers can't afford the deposits, therefore if investors can and they buy them - at least that is providing homes that those very people can live in - whereas if they had to save up a deposit, they would not be living in them.
Rob Cargill, London

The issue of tax relief is an absolute outrage
Joy Waters, Norwich
I have children in their 20s whose lives are effectively on hold because of the ludicrous situation in the housing market. They earn too much for social housing, but not enough to buy a house. Most so-called affordable housing is snapped up by investors and I think the issue of tax relief is an absolute outrage. What no one ever seems to answer either is the question of security of tenure. What will happen when all the 20 somethings are having children in a few years time. My children have both been forced to move simply because the rent has been increased or the property sold. Where is the stability in six month tenancies for families?
Joy Waters, Norwich

Offsetting interest against rent is not a "tax break". Any business making income from owning an asset pays tax on the net income after the costs of running and owning those assets, which includes interest payments incurred as a result of borrowing money to purchase those assets in the first place. BTL is no different. Unlike homeowners, BTL landlords will pay Capital Gains Tax on any gain in value when they dispose of the property. Everyone running a business is treated the same (and fairly so), and it is homeowners that get the tax break.
Chris Baverstock, Fareham

Buy-to-let landlords getting tax breaks is a total disgrace. It is absolutely clear that first-time buyers are taking out ruinous loans. The buy-to-let lobby and the mortgage providers have sewn up the UK housing market - it is scandalous. The so-called "housing market" has become the world's biggest ever pyramid-selling scam. It is ruining many, many people's lives. Houses are already only affordable by average people having to take out loans well over 10 times income.
Paul Shooter, Salisbury

Affordable Housing is quite rightly discussed on numerous occasions on radio and TV - but no one says how much in cash terms they mean by affordable. Anyone willing to come forward with an answer?
Pat Bourchier, Yateley, Hampshire

Those buy-to-letters of the borrow-to-let variety are clearly doomed
Duncan, Milton Keynes
Buy-to-let investors have out-priced many first-time buyers in all areas of the country. Their business model is built on rising prices, low interest rates, loose lending policies and also a preferential tax system. With many of these in the process of change those buy-to-letters of the borrow-to-let variety are clearly doomed. Yet banks are still signing off loans and some media outlets are shamefully hyping the market. I think more responsibility should be shown and loans and information relating to buy-to-let should come with a warning as people are unwittingly risking their retirements, and you only get one of them!
Duncan, Milton Keynes

We don't need any more new houses to be built especially on Greenfield sites. What most people don't realise is that for every person who wants a home there are five empty houses built before 1960.
Quentin Williams, Bristol

Buy-to-let owners who leave properties empty are not receiving any rent. Interest tax relief is only allowable against earnings from the rental income. Therefore, mortgages on empty properties do not attract tax relief.
Malcolm Johnson, Stoke-on-Trent

The buy-to-let landlord's mantra seems to be: "Gordon stole our pensions, so we have to invest in property." So one generation gets their pensions stolen, and now the next generation has had affordable housing stolen from them. What a triumph for our society.
Matt O'Donnell, London


The comments we publish are not necessarily the views of the BBC but will reflect the balance of views we have received. It is helpful if contributors state if they work for any organisation relevant to an issue discussed. Readers should form their own views on whether messages published represent undeclared interests, or views prompted by a common source.



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Tax call for buy-to-let homes
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