Next lot : Police station, one careful owner

It's the year of the sell-off. The Met, the MOD, National Health Trusts and British Rail all have property on the market. Mary Wilson fins out who is profiting

Michael Heseltine was in trouble last month for selling his constituency headquarters to McDonald's - who employed an old friend of his, Geoffrey Tucker, as consultant. He has also been embroiled in the controversy over the sale of the Ministry of Defence's married quarters.

Earlier this week Annington Homes (a consortium that includes the Japanese bank Nomura and the construction group Amec) was announced the preferred bidder in a project described as the housing sale of the century. The pounds 1.6bn sale of 57,700 MOD flats and houses in England and Wales is expected to provoke political outcry. Once the sale has gone through, the MOD will immediately lease back most of the homes, which it needs for operational use. But 2,700 properties will be surplus to requirement and these will be sold freehold for refurbishment and re-sale.

It is the year of the sell off. All government departments are being encouraged to get rid of empty homes. The Ministry of Defence is also selling development land, old redundant training grounds, air force and arms barracks as a result of the peace dividend, with advertisements for these going weekly into the trade press. Private schools, which have seen a sharp decline in attendance and therefore their life blood, are also having a selling spree.

Allsop, the auctioneers, has been handling property on behalf of the Metropolitan Police for some while. Much of this consists of unwanted hostels, training centres, the occasional police station and surplus policemen's houses. "We have been retained for three years," says Gary Murphy, chief auctioneer. "These are good properties and are fairly priced."

The company will also be auctioning surplus British Rail stock at a special auction at The Berkeley hotel in central London on 24 October. "We'll have about 60 lots with everything from old station houses, to yards, a pub, lavatories and even a watercress site - all were bringing in no income."

Who benefits from all this? The year of the sell-off means good news for developers. Many of the units will be eagerly snapped up by companies who will refurbish and turn them into dwellings, selling some at a premium to the private market, others as social housing.

At RAF Upper Heyford, Oxfordshire, 1,250 acres of redundant MOD land is currently being fought over for development. Wimpey, Taylor Woodrow and Westbury Homes have formed a consortium to build 5,000 homes and they plan to create "an innovative sustainable new settlement, midway between London and Birmingham, where cyclists and pedestrians take precedence and public transport takes priority over the private car".

A laudable plan if it ever gets off the ground, but the local residents are up in arms, worried about the number of homes planned to be built, and the increased traffic. Yet it has been projected that an additional 12,000 homes will be needed in Oxfordshire by the year 2011 and Upper Heyford will go a long way to supplying that.

Other major landlords who have been selling off property hand over fist are the National Health Trusts. Nursing homes and old hospitals come up for sale on a regular basis, again mainly snapped up by developers who see a chance to make money by converting them into luxury flats or houses. In London, the New End Hospital in Hampstead is being developed by Berkeley Homes (North London) and also in Hampstead, Westfield, the former ladies' college has been bought by LCR Developments. The company is restoring, re-building and adding new homes all around the existing, but newly landscaped, gardens.

Berkeley (Thames Valley) is working with Thames Water on a development, Barnes Waterside, on a site beside four reservoirs, which are now redundant because of the new London ring main. The reservoirs are being re-flooded and the adjoining land made into London's first waterfowl and wetlands centre.

Thames Water is also joining forces with Berkeley Homes (Kent) to create another company, Kennet Properties, which will develop its unwanted buildings. The first of these is the magnificent New Riverhead building, which used to be its head office, in Rosebery Avenue, London EC1.

Northacre, the developer of the superb reconstruction of Observatory Gardens in Kensington, London W8, has purchased the north side of the former Royal Brompton Hospital, South Kensington, which will be turned into a residential site. Northacre's section should be ready for occupation early 1988. It is a grand project, and helps to put a positive light on this selling fever. Rather than see fine buildings lie derelict because there is no commercial use for them, or tied homes of ex-personnel remaining vacant, they are being scooped up by residential developers, who are providing employment as well as a valuable end product - much needed housing stock.