Nicholas Barbon (1690, A Discourse of Trade)

Another use of Interest, is, It is the measure of the Value of the Rent of Land; it sets the Price in Buying and Selling of Land: For, by adding three Years Interest more than is in the Principle, Makes the usual Value of the Land of the Country; The difference of three Year is allowed; Because Land is more certain than Mony or Stock. Thus in Holland, where Mony is at three per. Cent. by reckoning how many times three is in a Hundred Pounds, which is Thirty Three; and Adding three Years more; makes Thirty Six Years Purchase; the Value of the Land in Holland: And by the same Rule, interest being at six per Cent. in England, Land is worth but Twenty Years Purchase; and in Ireland, but Thirteen; Interest being there at Ten per Cent: so that, according to the Rate of Interest, is that Value of the Land in the Country.

I do not quite understand what the above means.

In particular, what does for example "Thirty Six Years Purchase" mean? Does it mean that to buy a piece of land, one pays 36 times the (annual) rent?


It seems that the gentlemen is speaking in the english dialect of England. The Years purchase phrase is still used today.


Years Purchase: The amount yielded by the annual income of property; used in expressing the value of a thing in the number of years required for its income to yield its purchase price, in computing the amount to be paid for annuities, etc.

An example of its use is here: https://investmentproperty.co.uk/property-investment-calculators/years-purchase-single-rate/


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