Thursday 8th May

It is undisputedly the way to go, hustle together enough for a deposit on a property, especially in London, do the minimum required to smarten it up, maybe central heating a new kitchen and bathroom and then put it up for renting.  The smart thing to do is to let this property out for 6 monthly lets, and increase the rent to the maximum “the market” will allow each time.

The market in this case is the amount of desperation in those unfortunate enough to have to rent in the first place, as they try to find a place they can afford which offers the minimum in comfort and security.

This is yet another way in which “the market” rewards the rich at the expense of the poor.  I have even been tempted myself, though have resisted so far.  More on idealogical grounds than anything else, it is a surefire way of making money.  Someone else in effect pays your mortgage for you, while in the long run the value of your property increases.  But is it morally right that I as the owner should make my profit out of those unable to get onto the property ladder at all.  One of the trends of the post-war boom was for the number of homeowners to increase year on year, which it did until about ten or fifteen years ago, when the price of houses rose so high that more and more people were priced out of this opportunity and with no parents to help them were forced to rent.  This is now an epidemic, with more and more young couples being forced into expensive rented accommodation with the dream of owning their own house drifting ever further into the realms of the impossible.

Unfortunately too, every Government attempt to affect the housing market has been disastrous, as is the current help they are giving by guaranteeing part of the deposit, it is simply pushing the price of houses up.  Only a sustained and massive increase in the number of cheap houses being built will help.

Another factor of buy to let is that I wonder just how many of these “entrepreneurs” who are buying maybe one or two houses to rent out are declaring the income and paying their taxes.  Don’t be so skeptical Adrian, we live in an honest country – of course they all are.