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Last Updated: Friday, 16 February 2007, 16:15 GMT
Have Your Say: Buy-to-let
A row of houses

The buy-to-let mortgage market is enjoying a boom according to new figures from the Council of Mortgage Lenders.

Three hundred and thirty thousand buy-to-let mortgages were taken out in 2006 - up 48% on 2005.

But with interest rates rising three times in less than a year are landlords putting themselves at risk?

We asked for your comments, some of which are published below.

I cannot believe the partisan comments of the buy-to-let guests on your show. I live in Sheffield where many areas of the city are subject to the blight of buy-to-let which can result in noisy student neighbours for long-term residents, properties which are poorly maintained and the introduction of parking permit schemes where previously they did not exist. I believe the government turns a blind eye to the issues because inflated house prices and more people borrowing money is good for business. I agree with other contributors to your website debate there needs to be a tax penalty for buy-to-let investors - this will not happen however as no government would dare.
Christine Stafford, Sheffield

My husband and I rent a farm cottage in the country on a long term tenancy, reasonably cheaply. We cannot afford to buy our first house in the sparsely populated rural area where I live and do not want to move into town for many reasons. This is why, as a first time buyer, I want to investigate the possibility of buy-to-let instead. Naturally, I dream of owning my own home with a scrap of land big enough to have a garden and house my pigs and chickens but this is not feasible on Borders wages.
Sue Rudge, Berwick-upon-Tweed

The worst effects are caused by purchasers of holiday homes who prevent others from buying and from renting
Chris Grey, Guildford
Those who buy-to-let inevitably push up house prices, but at least these properties are available for people to live in as tenants. The worst effects are caused by purchasers of holiday homes who prevent others from buying and from renting. This is the first place to tighten taxation further.
Chris Grey, Guildford

I own three properties all of which are let. They were accumulated as the result of marriage and the death of a parent. Other factors beyond my control in this country have led to my current situation, including the untrustworthiness of the financial industry, pensions and endowment mis-selling for example. I am trying to do the best with what is around and I wish it were otherwise. I maintain my properties well whilst I work temporarily abroad. I think the biggest market drivers are the estate agents who have a vested interest in playing on fear and greed.
Steve, Plymouth

If the rent you pay is less than the equivalent interest that you would pay on the mortgage then you are saving money by renting. Why overburden yourself with a massive mortgage, additional responsibility for the maintenance for the hope of making a profit in the long term. With high transactional costs of buying and selling a house, the profit is not always clear cut if prices are not rising fast enough. There is a massive oversupply of two bedroom flats in many areas of the country which means that the rental market will become even more competitive for landlords seeking tenants.
David, Maidenhead

Whole streets where I live have the same hallmarks of landlord neglect
Paul, Cardiff
Bad buy-to-let landlords are re-creating slum areas of cities. You need only look at the poorly maintained student housing areas to see this. I rent because, despite being a professional, I cannot afford a mortgage. Consequently, I have to live in a damp, single-glazed flat with inadequate heating and crumbling walls. Trying to get work done is a massive uphill struggle. I am not alone. Whole streets where I live have the same hallmarks of landlord neglect. I found the smug tones of the buy-to-let advocates most infuriating. Profit at any cost is their watch word. I pray every day for the housing market to collapse so that my landlord can feel some of the pain he has dished out on his tenants in his quest for profits.
Paul, Cardiff

I have two flats in St Albans that I rent out. I bought one property in December 2004 and the other in December 2005. I have a mortgage on both. I bought both properties as an investment. Matt O'Donnell's comment about "greed & selfishness" is utterly unfair. Yes, of course it is a business and I provide a product/service. I take care of my tenants and obviously expect the same from them.
Hywel Davies, St Albans

The comments by "Lucie, Cambridge" are unbelievably selfish. Quite apart from her failing to understand that no amount of cutting back on DVDs and Pizza is going to allow a 20k salary to buy anywhere in the UK without taking on a reckless level of debt she also fails to appreciate that the provision of her pension should not reasonably be made by those less advantaged than herself.
Tom Boston, Cheshire

Many, many young people who choose to rent are doing just that: choosing to. They could afford to buy their first flat if they spent less money on booze and travel and if they were ready to commit to their partner and settle down. I know because I used to be one of them. Those who genuinely can't afford to buy a home should be helped to do so, of course. In the meantime are we supposed to give up the opportunity of a reasonable way of saving a pension?
Lucie, Cambridge

I agree with Matt O'Donnell. We found the prospect of buying a home, which remains the only method of gaining secure accommodation in the UK, was put out of our reach, and the chance of having a family is now very slight. We moved to Germany for a better life. Capital growth from housing must be eliminated so that such a vital resource for society is not abused by lenders and speculators.
Peter Willis, Bristol, UK

Buy-to-let is a means of transferring money from the poor (those who cannot afford to buy) to their landlords, simultaneously ensuring that the poor will never be able to save enough to buy their own property. I agree with Bill Hall that taxes need to be adjusted so that it becomes difficult to make a profit from owning residential property. Houses are for living in, not profiting from.
Graham Walker, London

I am a little concerned that people are being guided in a (potentially) dangerous direction, not least given the property climate in the US with regard to prices starting to drop, irresponsible lending practices and people taking out loans against their properties who are now facing financial hardship.
Jonty Bray, Bolton

Another knock-on effect from Gordon Brown's milking of the pension funds
David Rumsey, Sheffield
Your two contributors denied that it could raise property prices. I was surprised that the opposite point of view was not argued, namely that the vastly increasing numbers of house purchasers, swollen by the B2L mob, is the main mechanism for house price rises. Another knock-on effect from Gordon Brown's milking of the pension funds when he came to power.
David Rumsey, Sheffield

Do these people have any idea of the problems they are causing in our society? Many couples are now putting off starting families, even considering emigrating, because they see no hope of ever owning a family home in the country where they were born - entirely thanks to the greed and selfishness of those who wish to get rich from property. Let's hope this current housing bubble bursts soon, and give houses back to people who want to live in them, not make money out of them.
Matt O'Donnell, London

I am looking at investing in buy-to-let and cannot get away from one fact: as long as the property is mortgaged, you are actually using the property as a savings plan - putting so much in each month and having a lump sum (in this case a property which you own outright) at the end. The difference is that you are not simply putting money into a plan each month, and earning interest, which I could not afford to do; your contribution is paid for by your tenants. Therefore (barring empty periods and taxes) you are not actually paying for your investment. Am I missing something here or do others agree?
Lucie, Cambridge

I don't find this a particularly just system
David Sumner, Surrey
Buy-to-let investments are often a chance for those who already own property to pull up the ladder away from potential first time buyers and force them to fund the owner's retirement by renting the property from them. I don't find this a particularly just system. Having a roof over one's head and the chance to buy so that security can be had in old age should be a basic entitlement for any hard working person.
David Sumner, Surrey

I am currently living in Cambridge and paying a premium for rental accommodations of poor standard. The buy-to-let market is pressurising the housing market and new development does not appear to be the best of options in this crowded country with poor road infrastructure and public transport. The future seems very bleak in England for young professionals not working in the Canary Wharf district. Anyone with gumption, talent and the ability to work somewhere better will.
Terri, Cambridge

I couldn't believe what I was hearing. What evidence has the gentleman from Bradford & Bingley got to suggest that market will keep on growing? We have had three interest rises in six months and the Bank of England has not finished yet. Today the cost of borrowing is 50% higher than 2003 and the best way for our pension is to save not speculate on property.
Alex, Brighton

I find blanket condemnation of landlords is unfair
Susan Platter, Swindon, Wiltshire
We lived in a house near Exeter for three years, then decided we didn't like the location and moved to a rented house, letting our own house through an agency. We have always kept the house in good repair, even though for some years the mortgage was not covered by the rent. We have since moved away from Devon but some day want to move back, initially to our currently let property. I find blanket condemnation of landlords is unfair, but we are not the typical buy-to-let case because we bought to live there. I can understand Bill Hall's resentment but not everyone is the same.
Susan Platter, Swindon, Wiltshire

I am an estate agent in Brighton. Buy-to-let landlords should not be so naive. When several thousand properties in a town, or more in big cities, are bought by landlords to let out, they are immediately outside the selling market as landlords hold on to them. They therefore do not come back on the market and the number of available properties diminishes over the years... so the prices inevitably rise. It's plain logic!
Paul Bonett, Brighton

The Bradford & Bingley man said that buy-to-let does not affect house prices. Of course it does. It is not necessarily the price offered but the fact that they are in the market at all. Basic rule of supply and demand - the more buyers, the higher the price!
Adrian Hoare, Ascot, Berkshire

Buy-to-lets are a blight on the landscape
Bill Hall, Perth
Buy-to-let investors are a major problem. In many small villages locals can no longer find homes to buy as almost all the small-to-medium houses are bought up by investors. There should be a special rate of Capital Gains Tax relevant to residential buy-to-let properties - personally I would raise the rate to 50% but it could vary. Also, the properties are poorly looked after. People who rent have much less interest in their immediate environment and harmonious living with their neighbours. Buy-to-lets are a blight on the landscape. Investors buy to make as much profit as possible and put nothing back into the communities.
Bill Hall, Perth

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.

BBC Radio 4's Money Box was broadcast on Saturday, 17 February 2007 at 1204 GMT.

The programme was repeated on Sunday, 19 February at 2102 GMT.

Money Box



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