REAL ESTATE.

Waikato Times, Volume 116, Issue 19330, 9 August 1934, Page 11

REAL ESTATE.

A BOOM IN BRITAIN. DUE TO FALL IN INTEREST. England is in tlie midst of a real estate boom as old-l’ashloned and conservative in its character as John Bull himself, writes Fei’dinand Kuhn in the New York Times. It has taken tlie form almost entirely of a tremendous demand for rent-paying properties for safe long-term investment. The speculative element in it is relatively slight, it is utterly unlike the fever that gripped Hie New York real estate market in Hie years preceding 1929, and equally unlike the post-war boom in England, which filled the countryside around London with jerry-built cottages.

Ground Rent Properties.

This time tlie clamour is not for individual houses or office buildings, but for land on which houses have already been built and leased over long terms of years. ■

Fortunately for tlie blue-blooded families, the majority of Londoners still pay rent twice —once in ordinary rent to the owner of their houses and once in ground rents to the owners of the land on which their houses stand. And it is ground rent properties that are in sucli demand to-day that estate agents are swamped with orders to buy.

The demand to-day is estimated to be twice as great as in 1920, when new skyscrapers were sprouting like mushrooms In New York and the prices of American real estate were soaring. Only, a small part of the demand is being satisfied, chiefly because land owners like the Duke ot Westminster own vast tracts of ground rent properties in the heart of London, and are quite content not to part with their holdings. Actually the turnover, therefore, consists mostly of comparatively small parcels of property In outlying parts of London or of central London properties thrown on to the market by executors of big estates. There is also a brisk investment demand for country estates where small farming tenants still pay their rent to squires, almost as they did in feudal limes. Due to Depression. Like the recent boomlets in metals, raw wool, and other durable commodities. the present activity in real estate Is a by-product of the depression, especially of the fall in interest rales. Much of it can he traced directly to iho British Government's colossal conversion operation, which pushed down interest on the Government war loans lo a meagre .'it per cent. Willi I lie industrial shares risky and with foreign bonds positively dangorI ous, British capitalists have been racking (heir brains during the past year lo find an investment ns safe as gill-edged stocks, ' yet yielding more. If Fngland were a new country or if London were constantly 'moving up-town," I be in vest men I in ie.il I (•stale would lie somelliing of a gamble. I But l.midon slill has Ihe stability of an ancient capital, despite the slut! 11 j business 1.0 Hie West F.nd in recent, i wars. An ordinary street wnicn i* I residential lo May can usually be depended on lo remain residenll.il I iwenl v-live years from now. I And an ordinary London lease is a

long-term affair, averaging 21 years and sometimes running lo the tantastio war lerm. The difficulty is to ibid 'enough of these properties on Um market. Thai is the problem Which is breaking the hearts ol many estate agents throughout Southern England. Aores Still Empty. One cannot conclude from Ihe activity In a real estate office that prosperity lias come back to England. Veres of Hour space are slill empty in office buildings In the financial 'HsIrii'l. and even Ihe handsome new rifllce buiiillnii's near the Houses ot Rarlinmi'ut are not tilling "P i,s meir promoters had hoped.

A ppidigimis amount of private construction is going on lo the tune

of more than 250,000 new houses In Britain tills year, but much of this is speculative. The same can be said of purchases of farming land In many parts of tho country, stimulated by Ihe Government’s efforts to do something for British agriculture. if the present demand proves anything it is that vast reserves of capital arc still lying idle, and that Government stocks arc no longer attractive enough to tempt even the most cautious investor.