Regeneration game

When it comes to buying, we all love the frisson of finding a new home in the next up-and-coming area. But are we in danger of finding ourselves stranded if we stray too far from safe territory? Cheryl Markosky reports

When can an area become too posh? When the last remaining "real" shop, a humble newsagents, is closed to become yet another boutique, according to residents and workers in oh-so trendy Westbourne Grove in west London.

When can an area become too posh? When the last remaining "real" shop, a humble newsagents, is closed to become yet another boutique, according to residents and workers in oh-so trendy Westbourne Grove in west London.

Faced with a bit of a stroll to either Elgin Crescent or Queensway in order to buy a newspaper, can of Coke or a packet of fags, local hairdresser Parsons Skott applied for planning permission to sell these less glamorous, but much wanted, products to the public from its front window. The new scheme is working well, with the added bonus of a free paper if you book in to get your haircut.

Is there a problem when a place, loved for its grittiness, is replaced by a duller and more settled existence? Do bona fide bohemians up sticks and leave in disgust when designer frocks are more common than the evening paper?

Mark Chick, of agents Bective Leslie Marsh's Westbourne Grove office (at the less gentrified end of Notting Hill where a drive-by shooting occurred not long ago), says: "It has been some time since the artistic crowd was pushed out of Notting Hill. Embarrassed by the value of their property, many of the bohemian types cashed in about five years ago and spread out to slightly less obvious North Kensington, Hoxton and Paddington." He points out that it is still possible to buy a pint of milk in Westbourne Grove, but it would have to be organic milk from achingly hip health food shop Fresh and Wild.

Bermondsey in south east London is another spot where the downright derelict has turned into designer heaven. James Hyman of Cluttons describes it as "increasingly cool and attracting media types." He should know, because he bought a flat here himself two years ago. "I am the only person to leave my building each morning in a suit. Rundown buildings are turning into art galleries and gastro pubs, and Zandra Rhodes has opened her fashion museum."

Another area that has moved swiftly from old industrial to must-have address is Clerkenwell in the East End.

Carl Schmid of Currell believes the change began with "warehouses and empty factories converting well into big living spaces - the original lofts. Then forward-thinking estate agents move in, media professionals see the potential and old pubs become bars, studios are commandeered for apartments and old schools and churches are transformed."

Lulu Egerton from Lane Fox, Chelsea, explains how a new neighbourhood can emerge out of the blue. "Twenty years ago I lived on the Fulham Road. It was really down at heel, but in the early Nineties the area began to attract trendy pubs, cafes and nightclubs. Suddenly, it became 'The Beach' and very fashionable. Such a renaissance might appear surprising, but there generally is a pattern with the arrival of good eateries and shops."

Prices soar as the rundown becomes right on. In 1994, Egerton sold a four-bed house on Lamont Road for £580,000. It would sell today for £1.3 to £1.5m, she reckons. And a basement flat in Callow Street that fetched £135,000 would cost considerably more at £400,000.

It is hard to separate the "regeneration factor" from inflation, but regeneration usually links to geographical boundaries, observes Marc Walker of FPDSavills in Birmingham. "An area that is cheaper and next to an established spot starts to take off. It is almost like filling in the gaps."

Currently, the hottest place in Birmingham, Walker believes, is the Jewellery Quarter. "St Paul's Square looks beautiful and a tree-lined street will always be attractive. Already, a few bars and restaurants have arrived."

Tony Carey, managing director of developer St George, carries out market research for urban regeneration schemes in the capital. He says the trick is "striking a nice balance with mixed use, high density and close proximity to parks. We like to build no further than 10 to 15 minutes from public transport and love to be near water. We need to know we can uplift values in the area."

Property marketing consultant Bob Barlow, whose clients include Barratt Homes and several leading housing associations, agrees. "The circle turns slowly, but it never stops turning. What this means, especially in London, is that most places eventually get their turn as economic, social and infrastructure forces interplay through the various booms, busts and trends.

"I'm having a bet that in 150 years Barking and Dagenham will be the new Kensington and Chelsea, with the Dagenham knobs sneering down from their glittering glass towers at the poor plebs queuing at the Cheyne Walk Job Centre."

And why not? It's only taken a few years for London's once-grimy Wapping, Limehouse and Shad Thames to be transformed. "Now this is where you eat out at restaurants like Pont de la Tour, waft through the modernist splendour of the Design Museum and sleep in your £2m loft," Barlow points out.

The good news is that if you are buying in an "edgy" area in today's flat market, you're likely to get a pretty good deal. Most developers are prepared to negotiate in order to shift their wares.

But Yolande Barnes of FPDSavills' research department cautions: "The market is akin to a tidal wave. When times are good, regeneration flows out to untapped places. But when things aren't so good, the water pulls back and you could get caught out." Then it is safer to stick to established areas, she argues, rather than venture out into the unknown.