Buy to Let

Justin seems to have jumped on a popular bandwagon; the one that vilifies buy-to-let landlords.

And so, the nation owns Bradford & Bingley’s buy-to-let landlords and looks like it will do for some time. Seeing as nobody else wants them and they don’t seem to have much other uses, couldn’t we put them to proper work for the good of the country? You, know community service or something.

They could wear high visibility jackets so the public could see justice at work. We could send them rented door to rented door to explain to nurses, teachers and other key workers why there isn’t enough affordable housing to go around. Send the landlords to rural ghost towns to explain why the local economy is knackered and why the original residents’ children can’t afford to live in their home villages.

I’m sorry!?! I’ve always been puzzled by people who talk about affordable housing and then vilify private landlords. If the private landlord did not buy the property, maintain it and then let it, what would happen to it? It might – possibly – be sold to a private owner, but that’s no guarantee.

To put this into perspective, I am now a landlord. Unable to sell Longrider Towers, Mrs L and I opted for plan “B” – letting. Our mortgage comes to around £80 less per month than the rental income. Anyone who suggests that we are some sort of profiteering landlords is seriously mathematically challenged. Interest rate rises in the next couple of years will wipe out that difference and we still have to pay for any capital expenditure on the property. Longrider towers is, frankly, affordable housing. It’s just that it isn’t owned and let by the state. The rental is the market price for the type of property. Significantly less than the cost of a 85% – 90% or so mortgage.

There are, of course, landlords who do let with the sole purpose of making a profit. Why not? Justin bemoans the fate of the nurses and firefighters et al, but do they not go to work to earn a living? Of course they do. We all work to make a profit. Profit keeps the economy turning. Profit is not a dirty word; it puts food on the table and a roof over our heads.

Property letting provides a service. That service has to be paid for. The landlord is making a living providing that service. It is legitimate and fulfils a need. There are – as in the story Justin links to – landlords who are very foolish with their borrowing and that’s just tough titty frankly – I have no more sympathy with them, than Justin does.

An acquaintance of mine is a landlord. He buys derelict properties, renovates them and then lets them. If he did not do this, someone else would have to, or the properties would continue to moulder. So, what’s it to be? My acquaintance buying properties (and taking on the associated financial risks) and enabling people to live in them, or leaving them empty and derelict? Why should he not do this as a business? It is perfectly reasonable employment. It keeps a small army of builders, plumbers, electricians and decorators gainfully employed, too.

The rural ghost towns are not ghost towns because of buy-to-let landlords, they are – like the rural village I lived in during my teens – ghost towns because, among other things, there is insufficient work. There are a range of reasons why the young decide to leave rural towns and villages and seek their fortune in the city; it has been that way for generations and was certainly the case in my village. To blame it all on property prices and to blame property prices on people who are letting their property is disingenuous.

There will always be a need for the private rental sector as the council and housing association stock will never be sufficient and not everyone can find the wherewithall to fund a mortgage – while they can fund the monthly rent.

BTW – the nation does not own Mrs L and I and it never will. So, Justin, fuck your community service, okay?