Property: Everywhere, the newcomers are flooding in

The old mattresses and floating pieces of plastic are gradually disappearing from the canals and they are increasingly seen as places for leisure, and living. Penny Jackson meets a man who is at home on the water, and considers the many options for those who would like to enjoy the tranquillity they offer while remaining on terra firma.

According to British Waterways, which runs the canal system, half the population of this country lives within five miles of a canal. If that is something of which many of us have only just become aware, it is probably because canals are at the heart of recent urban regeneration.

Until now, the canal corridors that ran through the redundant and neglected industrial areas were generally seen only by those in boats. But with the trend for transforming factory, warehouses and mills into fashionable homes has come an appreciation of the canals themselves has been kindled along.

For some, the discovery that they have a special feel, quite different from rivers, is nothing new. Steve Day, an electronics engineer, not satisfied with having always lived alongside canals, has taken to life on the water. His home is a 40ft steel narrowboat on the Grand Union Canal near Berkhamsted and when he is not working - at present in a local boatyard - he is travelling through the country's vast system of waterways. "I even bumped into my parents once in Manchester. I turned round a corner and there they were."

Abrupt changes of scenery are one of the great charms of canals. One moment countryside, the next a sweep of warehouses. In the past five years, Steve Day has seen big changes. "The development is a mixed bag. Many of the buildings, barges, leggers' huts and lock-keepers' cottages have been done up well, but there are still some sad old places, tucked away."

His greatest concern is that the canals are changing from oases of calm to busy, overregulated waterways, where there are even suggestions of speed guns being introduced. "Too many people fly up and down without any respect for safety or the environment," he adds.

While leisure activities have obviously revitalised many canals, British Waterways, a government body, is charged with the responsibility of encouraging their use and development while preserving their character and has to be consulted on all planning applications.

Like Inland Waterways, a voluntary association which has fought long and hard for the survival of canals, it sees one of the biggest threats to the diversity of the canal system coming from a tendency of developers to adopt a common standard. Unique features can get lost under uniform designs of stone, brick and cast iron and if it becomes impossible to tell whether you are in Scotland or Staffordshire, something irreplaceable has been lost.

Charles Khoo, an architect, responsible for Baldwin Terrace on Regent's Canal in Islington, believes there is enough freedom for imaginative design within the original facade. "Large industrial windows means that you can make the most of views of the water without losing the detail." Indeed, since most canal-side facades are protected it is often more a case of keeping tabs on the scale and sensitivity of new schemes.

One of the most successful of those, it is agreed by even the most ardent conservationists, is in the centre of Birmingham. Its maze of canals lent themselves to the regeneration of a once-dismal area that is now thriving and fashionable, with restaurants, bars, shops and business along the waterside. Crosby Homes's popular Symphony Court development of 143 homes, in Brindley Place, sold in year.

Out of town, the old lock-keepers' cottages are always in demand. Clive Mosson of Aitchisons in Berkhamsted finds they do not become available very often, and can be small, although, of course, they usually have rural views.

The Victorian villas in the centre of Berkhamsted with gardens that run down to the canal would start at about pounds 169,000 for one with three bedrooms, rising to pounds 235,000 for a larger house. Moorings add a premium of around pounds 20,000-pounds 30,000. A home in a converted mill on the outskirts of the town is on the market for around pounds 225,000. In Derbyshire, a converted grain store in the Shardlow Wharf conservation area is for sale, through Savills, for pounds 195,000.

There are few large properties on canals, even if images of grand houses in London's Little Venice do spring to mind. A large Georgian house that is about to come on to Aitchison's books predated the canal, and since it is sandwiched between the railway line and waterway was clearly an obstacle in the path of the two early transport links. Canal-side dwellers must also accept that pedestrian traffic along the towpaths comes with the view of the water.

David Fickling, a children's book editor, who has recently moved into Berkeley Homes' development on Oxford Canal at Port Meadow, relishes the idea of a working canal. "I look at the old iron foundry and like the thought that perhaps manhole covers were being made and sent off to the empire. If you are interested in industrial archaeology and history, canals are a wonderful place." Nor does he object to intrusive sounds. "One of the nicest things during the summer was the music from a passing barge."

And as for the nearby railway line, "the sound of the train is brilliant, if rather loud at three in the morning".

Aitchisons: 01442 862533; Savills 0115 955 1122; Berkeley Homes, Oxford Waterside: 01865 311449