A series of articles in the Guardian Newspaper range over various aspects of housing. One recent one examined the role of ‘Buy to let’, suggesting that these investors are bad for the housing sector as they compete against home buyers often obtaining cheaper loans and limit tenancies so they can sell up quickly if the market changes. Buy to let investors seeing house prices on the up play a part in pushing up house prices further. If the market is tight this has an even greater impact on prices.
It is the current crop of landlords, those who already have at least one property for rent, that will make the biggest impact over the coming years. They have the benefit of owning an already profitable asset to use as collateral on the next deal.
There is also the suggestion that buy to let landlords may be getting around the tax system.
Add to the mix HMRC analysis that buy-to-let landlords fail to declare £550m in tax due on income from let property (not including their undeclared gains on the sale of their properties), and that landlords claim £7bn of capital allowances for upgrading their property with few checks on whether they actually carry out the work, and you have a bad situation.
Comment The implication of the article is that ‘buy to let’ is contributing to problems in the housing sector. So what should be done? The article supports rent controls and longer tenancies. But should we also look at restricting ownership of housing? Should people be able to borrow against the value of existing housing assets to purchase more housing? Do we need to move towards the provision of more social housing?