BTL: Buy to let vs Borrow to let

[TopOnePercent]

It's difficult to avoid the conclusion that if borrowing to let is profitable, where does the profit come from, other than tenants who are being excluded from being able to upgrade from being a rent payer to being a mortgage payer?

Undoubtedly some of it must come from the tenants. However, I have little doubt that I could borrow at a significantly reduced rate over a great many renters, due to the equity in my home, and my other assets. So some of the profit comes from the banks too.

[Hariseldon58]

The landlord who offers private rented accommodation does not always fish in the same pond as a first time buyer. The landlord may buy unmortgageable property and refurbish it an bring onstream "new" housing , this has positive benefits for all.

The argument about tax relief for landlords is simply a question of whether the capital is provide in part or entirely by the landlord's own resources or is augmented by outside capital. You can be certain large businesses would not enter this market this market without a source of external capital, effectively loans/bonds or equity. The provision of external capital in housing provision is generally seen as a good thing in driving the suppply of new housing stock desperately needed to reduce shortages.

Not many people would own their own homes if they had to save up the cost entirely from their own savings...

IsleOf WightPete sums it up well, its a question of what deductions are allowed for the calculation of taxable profits, make the business unattractive and you will deter letting of property but while might see this as having a positive spin the long term effect would be a shortage of property to let, most would see this as a bad thing.

Anecdotally I see from my business interests a larger number of landlords reducing their property portfolios than those adding, not just the fiscal disincentives but increased regulation having as great an impact.