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** Excess supply of luxury new-build London housing back inthe spotlight after Capital & Counties trading update
** After reporting no new sales in the quarter to Feb 24,Capco says it has sold 9 units of its phase 2 development inEarls Court for the next 3 month period
** Co is planning to build 7,500 new units in Earls Court(one broker estimates 5,700 still to be sold excludingaffordable homes)
** Morgan Stanley says medium-term prospects forLondon-focussed developers is challenging due to rising supplyand falling demand
** Two other brokers see figure as disappointing despite thecompany pointing to a pick-up in enquiries
** Shares out on loan in Capco have continued to climb (6pct of free float or 30 pct of shares available to borrow)
** Similar picture for London-focussed peer Berkeley Group(5.4 pct shares out)
** Short case based on the fact oversupply at the upper endof the London market has been underestimated
