You can buy a flat in central London for under £200,000 but chances are it will have a short lease, says Angela Pertusini

HOW do you get to buy a flat in Knightsbridge - "ideally located for all the shopping facilities" - for just £189,000 (€275,664)? Short of a time-machine that will transport you to 1991, these days you buy one with a ludicrously blink-and-you'll-be-on-the-streets-once-again, short lease (in the case of the one-bedroom, £189k period conversion, just seven years remain).

Of course, no one in their right mind would buy one to live in, can you imagine the audible ooze of your equity draining away?

No, silly, the wheeze is to buy one and let it out.

"If you're buying from a rental investment perspective, you can get a much better return," says Angus Fanshawe who heads the valuation department at the Douglas & Gordon chain of agencies.

And maybe that was the case once, but the figures no longer seem to stack up quite so conveniently.

Take that Knightsbridge one-bed - other properties on the same street achieve £600 (€876) a week or so - that's about £31,000 (€45,250) a year or £217,000 (€316,772) over seven years.

It's not a huge return on your investment and one that relies on 100 per cent occupancy, no letting fees nor any freehold management fees, which can be punishing.

Over the other side of Sloane Street, in Belgravia, there is a three-bedroom apartment with a 16-year lease available for £850,000 (€1.24 million).

Again, do the sums: the same flat is being touted at £1,500 (€2,190) per week , £78,000 (€113,895) per year - a rather healthier circa £400,000 (€584,071) profit over 16 years but the same provisos (voids, maintenance, stamp duty - I feel ill just thinking about it).

It's not often I will say this but you would make more money, and have some guarantees, if you were to stick the money in a savings account for 16 years (which is probably why banks won't lend on anything with less than 60 years to run).

Fanshawe talks up the possibility of buying a flat with a shortish lease, say 40 years, and later applying for a lease extension - a way of spreading the outlay.

However, remember that for every year you delay this, the cost of the precious extension will grow.

It's also a risky strategy: with admirable candour, he warns that it is crucial "not to take the advice of the selling agent on the likely cost of extending the lease".

There is talk of the power of the freeholder being weakened, campaigns to have this feudal system of land ownership abolished altogether, but peasant revolutions don't generally achieve very much in England.

Leaseholders have, grudgingly, been given the right to buy a share of the freehold for a nominal sum.

However, crucially, they have to have more than 80 years remaining on their leases.

It's hard to see anyone, certainly not any government, redressing the balance by siding with the little people (especially the little ones residing in some of the UK's smartest addresses) to take on the likes of the Duke of Westminster's Grosvenor Estate or, indeed, the Crown Estate, notionally owned by HM but the income from which is paid directly to, erm, the government.

Gordon Brown is pretty much guaranteed the keys to No 10 in six weeks' time (William Hill bookmakers are already paying out to punters who have, over the past 10 years, put a bet on him to take over from Blair).

Now he has, in a spooky echo of Margaret Thatcher, pledged to make Britain a "home-owning democracy".

This is completely terrible news for all investors, of course, but, before property deeds are shredded and thrown to the wind like so many Enron share certificates, I think this is likely to be rewritten as an "aspiration" rather than a "promise".

After all, plans such as ensuring an extra 20,000 new homes are built each year fall a bit short on the reality of the housing shortage and, with a lot of Middle Britain (not to mention the Irish Republic) relying on the housing market for a comfortable retirement, he would be a fool to help too many people out of rental flats.

Combine this with the British passion for protesting if someone so much as tries to build a kitchen extension, never mind several thousand new homes.

I think we can safely guarantee Prime Minister Brown will prefer to turn his attentions to infinitely more solvable problems such as Iraq or the National Health Service.

Signs of a slowdown? It's early days but after the orgy of bonus spending at the beginning of the year, the City boys' piggy banks have been emptied and everyone else is just too strapped after the rash of interest rate rises to try to compete.

Finally - and rather thrillingly, in a morbid kind of way - Londoners seem to be saying "Enough!"

Bad news if you're in it for short-term, capital growth, great news if you've got an empty rental - those with iron constitutions are choosing to rent and wait for the correction to happen.

Maybe this time they will finally be right.