apartments

I have been contacted by an investment company that is interested in taking long-term leases on houses or apartments in WGC. Actually the investor is looking invest in Ware and in other locations outside of our region.

The objective is to rent long term to provide apartments for corporate clients who want to put up employees from a few weeks to many months.

The lease will have to permit sublettings, but otherwise will be fairly standard. Rents are at or above market rents. Demand from short-term tenants is strong so this is a very viable business.

An audit by Commission for Architecture and the Built Environment (CABE) on housebuilding in the UK has condemned the majority of new developments:

A staggering 82% of new homes built over the last five years aren't well-designed and fail to measure up to the building industry's own benchmarks, says the first national audit of new private housing design. Nearly a third are so poor they wouldn't have got planning permission as they stand.

See The BBC News Magazine for more details.

Housebuilders have more to fear from flats' price fall

By Charles Fairhurst

Published: January 25 2007 02:00 | Last updated: January 25 2007 02:00

From Mr Charles Fairhurst.

Sir, The oversupply of new flats (report, January 20) can hardly be a surprise to those that organise buy-to-let syndicates; as they are unregulated, I suspect they are not required to advise their investors of these poor returns. Oversupply of flats is clearly a problem but all new developments have a "stabilisation" period when short-term owners become sellers; what has changed over the past three years is how many of these investors and owner-occupiers have become short-term investors and so the "stabilisation" periods have lengthened.

Housebuilders perhaps have even more to fear from this news; as many have become dependent on buy-to-let syndicates for off-plan sales and both the increase in short-term investors and the oversupply flats of new developments are combining to hold back values. Equally concerning may be that owner-occupiers have become particularly disenchanted with ever smaller flats in far from attractive new developments, built on brownfield land; the government's planning policies are responsible for this but the housebuilders now have to build and sell them.

The good news for long-term investors is that whilst a longer "stabilisation" period has provided very little short term capital uplift, these properties will revert to mean as they become "second hand".

Charles Fairhurst,

Chief Executive,

Fairbridge Residential Investment Management,

London W1U 2RE

Copyright The Financial Times Limited 2007