Your leader (FA, 31 March) on buy-to-let (BTL) evoking more regulation as a remedy for a perceived inbalance in a commercial market will have surprised many.
Leaving aside the political and economic philosophies, the current disincentives in the BTL sector will result in some realising gains and others less inclined to pursue this form of investment, bearing in mind the new mood music. This is the Canute moment for those authorities seeking to stop the tide of housing demand, without stimulating supply.
Reducing the supply of private rented property, thus diminishing availability, will result in rising rents. The political solution, as already mooted in Scotland, is rent control, developing a crisis into a catastrophe.
Have the authorities really decided to give up on capitalism and embark on a regulated but unsustainable housing policy?
As a committee member of the Federation of Small Businesses, the manipulation of the market against the interest of the small entrepreneur is surprising and alarming. The average return of 4.6 per cent on BTL properties does not indicate exploitation or the re-appearance of Rachman.
Given the risk and involvement, this return is in no way excessive. I am one of those exiting the market, as experience in the financial services industry confirms that regulation, financial and operationally, will expand exponentially, until supply and demand force reassessment of this ill-conceived policy. This reassessment will have been preceded by financial trauma to many currently seeking to counter low interest rates. Will we never learn?
John West
West Highland Finance Consultants,
Inverness,
Highland
