If people are that stupid after all that has happened than I've no sympathy for them. You should only buy what you can afford and if you cannot afford it don't buy it.
You haven't answered the question, who is going to house the people renting if the house is sold? You do realise the state is abysmal at housing people and have a hugh backlog on those needing housing, a need that is catered for by the much maligned private landlord who is taxed at every turn. I'd say a lot of the reason for housing shortgages is mainly down to lack of supply but also because people like me won't buy as the returns are abysmal, and the red tape every more onerous.
I agree with your first point...hence it's why I don't like to see debt write offs while retaining house ownership now for people in trouble.
And the kind of deal struck in the original instance highlighted in this post, IMO, only encourages excessive risk taking in the future as people believe they'll never lose what they have no matter how indebted they find themselves.
I don't get your question about who will house the people currently renting if the house their in is sold??? If they're renting now, they just go and rent in a different house if their current place is sold...why are you bringing the state and social housing into this....have you info on the tenants in these buy to lets that they are currently receiving RA for example?
On your last point, I think perhaps your dragging a different argument into the mix here from a landlords perspective?