** London prime property prices are worrying Liontrust fundmanager Stephen Bailey, who has sold his holding inLondon-focused developer Capital & Counties
** UK housing stocks among worst affected by UK's vote toleave the EU (Thomson Reuters Homebuilding index off lows but still down 26 pct since Brexit)
** Worries focused on slowdown in foreign investment andoversupply in London luxury property
** Capco fell >5 pct on Tuesday when it wrote down the valueof one of its prime holdings in London by 14 pct, following inthe footsteps of St. Modwen's 10 pct cut to its stake inupmarket Nine Elms early July
** Capco's shares now down 36.5 pct YTD and one of the mostshorted stocks in the FTSE 250
** Bailey more confident on outlook for affordable housing,prefers construction stocks such as Telford Homes (focused on non-prime London), Kier Group and GallifordTry (both nationwide)
** Kier saw no Brexit impact due to its wide range ofactivities, while Galliford said too early to tell (RM:kit.rees.thomsonreuters.com@reuters.net)