Is it worth buying to let?

Last weekend's papers were full of news of record-high rents in Britain and tips on how to get into the buy-to-let business. But while getting into buy-to-let might (and after expenses only just might) provide an income, it is worth remembering that Britain's property crash isn't over yet: what you gain in income you might lose many times over as the capital value of your house falls.

How much? If you adjust for inflation, British house prices are down about 20% since the beginning of the financial crisis. That might seem a lot, but it isn't enough. Look at a chart of UK house prices over the long term, says Shore Capital's Jon Bell, and you will see that "steep rises in house prices" have been followed by "equal and opposite corrections".

Between 1989 and 1995, for example, house prices fell by 37% in real terms, something that resulted in "the reversal of...all of the real gains made in the period between 1982 and 1989". For that to happen this time around, prices would have to fall by another 40% or so in real terms.

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If you were in the buy-to-let business, you'd have to hope that British rents would hit pretty regular new record highs to compensate you for that.