Rentier landlords – back in business

There was an article in the  The Guardian on 29th June 2013 “Meet the new class of landlords who are profiting from Generation Rent” by Patrick Collinson. A crucial factor that was missing from the article was the role of the banks in what is becoming a national scandal. According to the Council of Mortgage lenders the stock of buy to let housing continues to grow and at the end of the third quarter last year the number of outstanding loans totaled 1.4 million worth £164.3 billion which is 12.5% of the total market of 11.2 million mortgages worth £1.2 trillion. The banks are at it again protecting what appears  to be nice little earners at the expense of the first time buyer. The buy to let purchaser can borrow up to 80% of the property value where as a first time buyer can only borrow up to 75% of the value of the property. If, by some quirk of fate, there were was a substantial increase in first time buyers the bottom would fall out of the buy to let market due to falling rents and the banks would find themselves holding worth less loans. Of course the banks will not let this happen as they effectively rig the market against first time buyers. What is also disturbing is the view of landlords that benefits are paid to tenants “who are not very good at handling money”. They want to abrogate the risk of any normal business and get a free line of finance directly from the tax payer. What next? Rachman tactics of pulling out the window frames and throwing in dogs to winkle out tenants whose only crime is to be poor?

Attached documents (click to download)

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