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Has buy-to-let become too popular for its own good?

Here's a thought. The Chancellor may have done the buy-to-let industry a small favour with his emergency Budget in July. What follows might sound absurd and may go against the business grain but it's worth considering.

Here's a question to get you started. Has buy-to-let become too popular for its own good? 'It could never be too popular', I hear you say, as it means more sales to landlords, more tenant-find fees and more opportunities to fully manage properties. 

Buy-to-let has gone mainstream, no doubt about it. The press is full of articles on over 55s withdrawing lump sums so they can replace pensions with property. Celebrities, footballers and Big Brother stars are giving interviews on how their fortunes are squirreled away in bricks and mortar. 

Even regular Mr & Mrs Smith types are being unveiled as property gurus with rental empires worth millions. The media is portraying buy-to-let as the path to better returns and a rosy future. And to some degree, letting agents are part of the hype – with blogs, advertorials and marketing messages about making 'your journey into property investment' as easy as possible.

With any boom sector comes 'too-good-to-be-true' fixes that can tarnish an industry and portray the wrong image. You may have read about the 'get rich quick' type seminars given by professional presenter Maria Davies on behalf of Gill Fielding – two women who have turned to property investment to make millions. 

Their seminars could be viewed as 'quasi cult' and were worthy of a Daily Mail 'special investigation', exploring the promise of rewards with little/no capital outlay. It brought to mind pyramid-style businesses, appealing to average folk desperate to take a bite of the buy-to-let cherry.

The danger here is the lettings industry will deepen its image of a fast buck, rip off sector in an age when agents and property managers are on a damage-limitation exercise. I know fellow peers are working hard to present a professional, transparent image but the hard work can easily be undone by an unscrupulous few and a 'cashing in' mentality.

Back to the emergency Budget. Changes to mortgage interest tax relief are happening and there's also the threat of the Bank of England limiting buy-to-let loans. These adjustments could possibly dampen the rush of unprepared investors who lack a grasp of rental basics and also stop maverick entrepreneurs from wringing the life out of the market. 

Would lettings agents rather work with landlord clients who understand the long game that property investment is? The risk with today's influx of 'green' investors is they may create an imbalance in the market, cause headaches for agents and leave a trail of unflattering headlines, should the property sector (and wider economy) wobble and panic set in. 

Of course, this is all conjecture and speculation. Perhaps the industry needs as many landlords as possible to meet tenant demand? What is certain is that professional standards and sensible judgements must override greed.

*Simon Duce is the Managing Director of ARPM Outsourced Lettings Support

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