"Buy to let investors will keep the South East the most prosperous area."
When I saw this title, I had to check the date. How could anyone write anything like this on the same day that also saw mortgage approvals fall almost 40 percent. However, the date was there - Thursday, January 24, 2008.
However, the article was even scarier than the title. According to a Homebuyer and Property investor survey, 70 percent of investors believe that the South east and London will be the top performing market this year. Furthermore, the article identified the "growth in buy-to-let interest in London and the South East" as the primary factor that "will help to buoy the UK property market."
The disconnect with reality didn't stop there. Around "40 per cent of investors" still considered new-built flats as "the most profitable buy-to-let investment."
So what accounts for all this unjustified optimism? "Supply and demand, improved transport links, wealth, foreign buyers and regeneration across the area".
Unfortunately for buy-to-let investors, none of their optimism is reflected in rental yields, which have in real terms, been flat for at least ten years.