Landlords warned on risks

For a decade or so during the Blair years.  Excuse me why I gag....I can't even mouth that phrase without feeling physically sick given what mess we have been left with.  Anyway.  During a decade landlords got used to the prospect that buying property was a one way street to guaranteed price rises and therefore a no risk investment.

This duped many landlords into the idea that there was NO risk associated with property investment.  Having first started investing in the dark years of the mid nineties when life was tough for landlords.  I know that this situation can continue for years.

Merryn Somerset Webb has long written about the risks associated with UK property investment.  Her latest piece in the FT reiterates her concerns and points to the fact that we may not be a great deal better off than the Spanish.  I disagree.  Unlike the Spanish we don't have a huge amount of property that was built speculatively for holiday makers from abroad and we have the little thing called 'green belt' which will always limit supply particularly in areas of high demand.

Where I do agree with Merryn is that yields on buy-to-lets are still not overly generous on a historic basis.  I like her remember when gross yields on decent quality property briefly reach almost double digits as they are in the US.  Now at that level property is a definite buy.....but we are not there just yet!

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