Letter: High cost of renting

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Sir: For those who cannot sell their houses, but who need to relocate or move to a larger or smaller home, letting one house and renting another seems a good solution from all points of view ('Mortgage debt exceeds value of many houses', 21 August).

Mortgage payments continue to be made, houses are not repossessed or sold at rock bottom prices, and owners are able to retain control over their affairs. Rents are indeed depressed and tenants hard to find at present, but what you lose on the rent you can charge, you gain on what you have to pay, so it should not be vastly more expensive to let-and-rent than to stay put.

But, unhelpfully, the building societies are quick to spot this as an opportunity to make more money. In our case, when we asked for permission to let our house, which had been on the market for a year, our building society told us there would be a non- negotiable increase of 2 per cent over our previous mortgage rate (not 2 per cent of what we were paying, 2 per cent of the outstanding loan) for the privilege. Two per cent is apparently somewhat over the odds, but I am told that 1.5 per cent is common. We would also, we were advised, probably lose tax relief on the interest on the first pounds 30,000 of the loan. I can only describe this as piling on the misery.

If the Government and building societies are really concerned to help mobilise those 'trapped' in houses they cannot sell, they should be positively encouraging owners to let. A good start would be for building societies to stop profiteering from owners who have to let their homes, and for the Government to amend the rules slightly on tax relief in these circumstances.

Yours faithfully,

ANNABEL CARTWRIGHT

Charlbury, Oxfordshire

25 August