Skyscrapers: Head in the clouds

London's property boom is heading upwards - literally. Chris Partridge looks forward to the high life

The Barbican towers, for 30 years the tallest blocks of flats in London, are about to be overtaken by a new generation of skyscraper apartments.

Pressure to increase housing densities and a new desire to express London's "world-city status" in architecture have combined to overcome the British prejudice against living in the clouds. But will skyscrapers offer investors better yields than traditional low-rise developments?

The three Barbican towers, more than 123 metres high, have always attracted good tenants, in strong contrast to almost all the other 1970s brutalist concrete tower blocks.

They succeeded where so many failed because they are well designed and well managed, according to Carl Davenport of Hurford Salvi Carr, who specialises in Barbican properties. "The flats in the towers are incredibly well designed, with very little space wasted and totally detached from their neighbours," he says.

Effective management by the City of London Corporation means the lifts always work and security is good. Owner-occupiers tend to buy on the upper floors, while investors prefer the lower levels and flats without the prized view of St Paul's.

The larger flats are popular with investors, partly because of the high service charge, Davenport explains: "If you are renting out you can get sharers which increases the achievable rent and helps spread the fairly meaty service charge of £4,500 a year."

The Aragon Tower in Deptford could not be a greater contrast with the high-class Barbican. It was part of the notorious Pepys Estate, for decades a no-go area for police and council officials alike. Now the low-rise parts of the estate are being rebuilt and part of the bill is being paid by the redevelopment by Berkeley Homes of the Aragon Tower as luxury flats.

Fourteen penthouses have been added to the top, transforming the silhouette from stubby to a fin shape, and increasing the height to 29 floors - 100 metres.

Prices set new highs for Deptford as well - flats start at £250,000 for two bedrooms and the penthouses rise to £750,000 for a three-bed unit with a huge terrace.

The first of the new generation of residential skyscrapers is under construction at Pan Peninsula, in Canary Wharf. It will rise to 50 storeys (155 metres), and contain 800 apartments ranging from studios to enormous penthouses. Concierge and room-services, plus valet parking, will make the lifestyle more like a hotel than a block of flats. Prices range from £230,000 to £10m for a penthouse.

Others will follow rapidly, including St George's 49-storey (180-metre) tower at Vauxhall; a 226-metre skyscraper in Blackfriars Road and the highly publicised "shard of glass" at London Bridge, a 66-storey spike 310 metres high. It will contain 114 apartments on the upper floors.

But will apartments in the sky be profitable investments? Dominic Grace of Savills warns landlords to be hard-headed.

The current vogue for towers is driven partly by the need for higher densities and partly by the increasing cost of land, but running costs can be high.

"Land values have at last risen to the point at which the cost/value equation of skyscrapers works, as you do need values at least at £650 per square foot to make them viable," Grace points out. "How they perform in the market depends on capital growth and service charges, which can be high because of the fancy high speed lifts and the need for specially trained window cleaners."

Peter Bromley of King Sturge's Canary Wharf office has wide experience of selling high-rise apartments. He believes people want to look out over a dramatic cityscape rather than a dull inner city street. "The growth in high-rise buildings has also been supported by the demand from purchasers for homes with a view," he says. Of course, as with anything people are prepared to compete for, the better the view, the higher the price. "The prices for an apartment can rise by anything between £7,500 to £10,000 per floor," Bromley says.