Move into millionaire's row

Hampstead or St John's Wood out of your price range? Think again, writes Nicole Sochor

DO YOU think a home in Chelsea, St John's Wood or Hampstead is beyond your means? Think again. It may well be affordable if you look at former council properties.

If the word "council" conjures up pictures of dismal tower blocks, read on. Some estates are small, attractive and located on the same streets as millionaire homes in SW3, NW3, NW8 and the City. Some boast gardens, parking, porters, even a swimming pool.

London is unusual in having state-subsidised housing in chic areas. Right- to-buy legislation saw tenants acquiring the best property, which is now being resold. These flats and maisonettes are sometimes half the price of privately-built equivalents, and may be a great buy for those whose aspirations exceed their wallets. They also make good rental investments, typically generating returns of 12-15 per cent a year.

Finding these bargains takes some ground work. Check out promising estates in your chosen area. Ask estate agents to keep your name on file (waiting lists are kept for some addresses). Many estate agents don't deal in former local authority addresses, so seek out those that do, which are often smaller firms.

Covetable estates include Wells House in Hampstead Village, an attractive red-brick estate with gardens, minutes from the Heath. "We had people queuing to buy a two-bedroom walk-up flat at Wells House priced at pounds 155,000. You'd spend pounds 200,000-pounds 250,000 for the same thing in a private block," says Ian Newton, senior negotiator with Chesterton's Residential, Hampstead. "Council blocks in Hampstead are mostly owner-occupied by people who take pride in their homes."

You can't get closer to Primrose Hill than Kingsland Estate, a low-rise estate that has a gate opening on to the grounds. "A three-bedroom duplex apartment would sell for pounds 175,000, half the price of a nice private block," says Stephen Phillips, negotiator at Winkworth, St John's Wood.

Indeed, what about St John's Wood, a cricket ball's throw from Lord's? Try Elgood House on Wellington Road, an eight-floor block with balconies. A three-bed flat will cost pounds 230,000-pounds 240,000, compared with pounds 350,000 in a privately-built block. "The block is very well looked after, with a caretaker and off-street parking in a fantastic location," says Mr Phillips. "But it's an ugly brown building and looks like a council block."

Not all council architecture is grim: in fact, the Le Corbusier-inspired Golden Lane Estate near the Barbican is Grade II-listed. The concrete and glass complex is so admired that six architects bought flats there last year through Hurford Salvi Carr, estate agents in Clerkenwell. Adrian Bagnall, residential sales manager, says: "The blocks are bright, well laid out and relatively spacious. There are communal gardens and a public swimming pool, two tennis courts and a badminton court. Outside the windows are concrete ledges with holes for plant pots, which shows consideration for the way people live." Studios sell for pounds 70,000 and one-bedroom flats for pounds 100,000. The agency has a two-bedroom flat at pounds 115,000 and a three- bedroom at pounds 135,000. An equivalent privately-built one-bedroom flat would be at least pounds 140,000, and two/three bed flats pounds 180,000 to pounds 200,000.

In Battersea there are three former council blocks bought by developers in the 1980s. The Falcons, near Clapham Junction, and Park South, on Battersea Park Road, are concrete tower blocks with parking, porter and leisure complexes. A one-bedroom flat will sell for around pounds 69,000 compared with pounds 115,000-pounds 140,000 in a mansion block, says Melissa Carter, sales manager at Douglas & Gordon, Battersea. Prices had been depressed because fears about the concrete structures meant mortgages were hard to obtain. The mortgage problem has now been solved, says Ms Carter.

Battersea Village Estate is a brick estate with pretty gardens near the Thames. It has the look of fashionable Dolphin Square in Pimlico, but flats are a fraction of the cost, with a two-bedroom flat under offer at pounds 140,000.

Even fashionable Kensington and Chelsea has ex-council bargains, says Jason North, head of the flat department at Chesterson's Residential, Chelsea.

There are some drawbacks. The estates are usually still council-owned and this puts off some buyers fearing a "problem family" next door. Properties are often leasehold and subject to service charges. The estate may look drab, with concrete communal corridors and no lifts. Internal decor may be poor.

Above all, a mortgage may be hard to get. "Most lenders won't lend on buildings of more than five to seven stories," says Ray Boulger, manager at mortgage brokers John Charcol. "Some companies won't lend on ex-council dwellings at all."

If you are thinking of buying a 1960s concrete high-rise home, check that you'll be able to get a loan: plenty of mortgage lenders are still wary of lending on these properties.