Property: Bargains in the Basin

Hot Spot Paddington Basin, West London

Little Venice has wonderful canal- side homes, cafes and restaurants and, less than a quarter of a mile away and even closer to central London, Paddington Basin doesn't. The former is internationally renowned, and the latter is unknown even to many local residents. Thousands of commuters daily pass within yards of a canal that remains derelict, unloved and ignored.

This ignorance is justified. Paddington Station, the A40 and St Mary's Hospital form, like burly bodyguards, a barrier between the long 25-acre stretch of water and the outside world. It is near impossible even to get a peek, and except for people connected to the Dudley Estate council flats or community school and centre within the basin area, there are no reasons at all to go there.

All change! Frogmore-Rialto plans to build 500 canalside residential units, and Regalian will construct more than 200 one, two, and three-bedroom flats, many with balconies or roof terraces. These luxury developments will include offices, food and drink premises, and retail outlets. Paddington Basin itself will be dolled up.

The changes have already begun. Deon Steyn of estate agents Cluttons Daniel Smith says that, since the arrival of the Heathrow Express, "we have already seen a notable increase in expatriates, international businessmen and airport executives looking for a pied-a-terre and smallish flats". Eitan Fox, sales manager of Plaza Estates, reports a lot of interest from French buyers.

Always attractive to people eager to get away to the country, the Paddington station area is now also luring those desirous of getting out of the country.

The area remains a melting-pot: "We are getting Irish investors from Dublin. We also have overseas buyers from Turkey, Italy, India and Pakistan, mainly investors or people looking for homes for their children studying at university in London," says Mr Fox.

The diverse population is served by a healthy mix of properties: period homes, new and newish flats and mews houses. Prior to the Heathrow Express pulling in, "the residential area in and around Paddington and eastern Bayswater was greatly undervalued, despite its large stock of impressive Georgian housing, proximity to Hyde Park and Lancaster Gate, and good public transport," says Mr Steyn.

In the nearby Hyde Park Estate, four- and five-storey period homes are available at prices which, while hefty, may also be considered bargain- basement compared to their equivalents in, say, Chelsea, which would cost an extra pounds 500,000.

This principle holds true for Paddington Basin generally. "The area around St Mary's Hospital was ignored for many years," says Mr Fox, "so the prices are cheap." For the time being.

The Low-down

Transport: the Heathrow Express takes 15 minutes and runs every 15 minutes, between 05.10 and 23.40 (a few minutes extra for Terminal 4). Paddington will have 27 airline check-in desks.

Prices: one-bedroom flats can sell for as little as pounds 85,000 if they are small and tired, and as much as pounds 200,000 if large and awake, say local agents. Service range from the low hundreds per year to more than pounds 5,000. The least-expensive freehold house goes for about pounds 300,000.

Mews: The large variety of leasehold or freehold mews houses includes fairly modern as well as period properties. London Mews estate agents specialise in these properties, which start at about pounds 400,000 and, in W2, rise to about pounds 1m. One leasehold mews house in SW1 has a pounds 4.5m price tag.

Council Tax: In super-low Westminster, Band A is pounds 216, Band D is pounds 325. The highest bands, where most of these properties fall, are only pounds 542 (Band G) and pounds 650 (Band H).

Park and Ride: Hyde Park, Oxford Street and Little Venice are minutes away by foot.

The Full Monty: By 2000, the largest convention hotel in Europe will be the refurbished Stakis London Metropole Hotel on Edgware Road. Area Underground and Paddington stations are getting facelifts, and St Mary's Hospital - where Penicillin discoverer Alexander Fleming's laboratory is now a museum - is getting a cash injection.

Estate Agents: Cluttons Daniel Smith, 0171-262 2226; London Mews Company 0171-402 3275; Plaza Estates, 0171-724 3100; Paddington Regeneration Partnership; 0171-313 1011.