Help Property Investors

The idea

The world of property investment has long been the source of personal wealth for many and a driving force in the economy. Recent changes to the Council of Mortgage Lenders guidelines has meant traditional property investors have been "shut out" and the only lending is being given to those that can fulfil the requirements of the Council of Mortgage Lender's Check List i.e. owner/occupiers.

This needs to be stopped right now. If I buy a car that is worth £20,000 for £10,000 and sell it for £20,000, no one bats an eyelid. But if I buy a house for £100,000 that is actually worth £150,000, I'm not allowed to sell that house for six months and even then, the sale price would be governed by the fact that I paid £100,000 for it. Valuers should be trained to value properties for what they are actually worth using type of construction, square footage, part of town, local amenities, schools, hospitals, accessibility for commuting, etc, not relying solely on local area comparisons. They should certainly be totally independent of the lenders (None of this "Times are tough. Devalue everything by 10%" that was going on two years ago).

As we (the taxpayers) still own a large proprtion of the lending institutions, we should force these lenders to provide one or two good quality mortgage products aimed at investors. (Whilst the bank base rate was down around half-a-percent, many buy to let mortgages were still running at around 7%. It's no wonder these organizations recovered as quickly as they did!) These mortgage products should take into account that a good entrepreneur can actually buy a property at one price one day and it is worth much more, even as the sale at that lower price is going through. If we wait until everyone fits into the CML criteria, we won't have a property investment industry to speak of.

Why is it important?

Property investors and BTL investors in particular, are a driving force in the homebuilding indusrty, which in turn supports many other industries by buying their products and services. If you stifle and control the BTL investors, the whole construction industry will suffer. This idea would cost nothing to introduce, would generate billions in additional taxes and get the home-build construction moving in the right direction again. Bear in mind that we are still 8 million homes short across the whole of the UK and we have a few thousand homes being built at the moment. The economy is not the problem. The lenders are.