EDITOR'S LETTERMerryn Somerset Webb
Should you back to buy-to-let?
Is the British property market in a bubble or not? Your answer will depend on where you live and what you think about interest rates. If you live in London, the answer is a clear yes. On any reasonable metric, there is a property bubble.
No one on even a pretty high London salary can afford to buy a place anywhere near the centre; yields are pathetic – more 2% than 6%; prices have been rising for 39 consecutive months; and any agent on even a nodding acquaintance with honesty will tell you that speculation is rife.
They’ll also tell you that more than 70% of new-builds in our capital are sold to foreigners – often ‘sight unseen’ – out of glossy brochures circulated at ‘cocktail previews’ in Hong Kong.
If you live elsewhere in Britain – perhaps just outside commuting distance of Newcastle – the very idea of a bubble will make you chuckle bitterly.
• Read the full editor’s letter here: Should you back to buy-to-let?