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No I disagree : Buy to let, being essentially free property, placed normal buyers, the poor saps who actually wanted to live in their property, at extreme disadvantage. Because of the vast differential in cost, in the competitive market of the last 15 years, they were regularly outbid, leading to an inflationary spiral as they were forced to bid higher to get into the market.

What helped this was that multiple buyers became preferred bidders via estate agents. When I sold my flat it never went on the open market as it was bought by a buy-to-let-er who was on their contact list.

Now they are making losses cos the rents aren't equalling the mortgage costs, and are having to sell at a loss. Good, I hope they all lose a lot of money. But I would have preferred such a distortion had been prevented in the first place.

keep to the Fen Causeway

by Helen (lareinagal at yahoo dot co dot uk) on Sun Apr 6th, 2008 at 05:49:11 AM EST
[ Parent ]
Right, the inflationary spiral could have been prevented by raising interest rates  as soon as the trend established himself. But there were too many people making money out of that.

When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill-done. — John M. Keynes
by Migeru (migeru at eurotrib dot com) on Sun Apr 6th, 2008 at 06:02:52 AM EST
[ Parent ]
Also, buy-to-let has been the vehicle of a large number of tax avoidance schemes, due to a failure to close various loopholes, which kept buy-to-let going far beyond simple arbitrage of rents vs mortgages.
by Metatone (metatone [a|t] gmail (dot) com) on Sun Apr 6th, 2008 at 09:05:15 AM EST
[ Parent ]
ABN Amro have an interesting report

 Home Truths

which I have yet to digest fully....

by ChrisCook (cojockathotmaildotcom) on Sun Apr 6th, 2008 at 09:30:35 AM EST
[ Parent ]

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