UK Focus: Newcastle Upon Tyne

Newcastle isn't afraid to take architectural risks, and that pioneering spirit is spreading to private property, says Graham Norwood

Newcastle on a chilly Friday night may not be the time to think of property. Looking at the micro-skirted girls outside the nightclubs, arms folded to keep them warm, you're reminded that they really do breed people tough up North. The sleeveless shirts of the men suggest that hardiness is common to both genders.

The revelling, noisy and boozy in roughly equal measure, stretches from 7.30pm until 2.30am on Thursdays, Fridays and Saturdays. Happy hours last roughly all night, a pint can cost £1.20 if you find the right bar, and chippie vans line city centre streets.

But while Newcastle's nightlife conforms to a stereotype, the rest of the city - especially its property market - is bucking expectations. For a start, it looks so good.

The plethora of bridges across the Tyne grab the photographer's lens, but the old city centre includes a small Chinatown, wide traditional streets and a better shopping experience than you might expect.

Of course, there are some dreary suburbs with run-down terraces and tower blocks, but the Government has given part of the city Pathfinder status, a 15-year regeneration programme that involves demolishing some old homes and funding new housing association shared-ownership and rented properties.

But in the pink sandstone streets towards the old city centre, in the posher suburbs such as Jesmond, and on the slowly regenerating Quayside, the city is simply lovely. There is plenty of greenery in the mix, too, especially at Jesmond Dene, which is a narrow wooded valley that stretches for three kilometres alongside the river Ouseburn between South Gosforth and Jesmond Vale.

Secondly, Newcastle - along with its neighbour across the Tyne, Gateshead - appears willing to take architectural risks. Sir Norman Foster's stunning Sage Gateshead, the Baltic arts centre, the St James' Park stadium stands, the Angel of the North and the Malmaison hotel sitting on the Quayside are all examples of public and private planning that defy the expectations of anyone who regarded the North-east as unimaginative and grey.

That same bravery is now being shown in private property. Little can be done to change Newcastle's huge volume of low-cost homes and its legacy of council housing, but an attempt to modernise it is being made in Byker, a suburb of 1970s social housing about a mile out of the city centre. Councillors and residents are about to choose which of five private architects' plans will be chosen to try to transform one of the poorest parts of Newcastle.

In the upmarket private sector, renovation is the order of the day. The Bonded Warehouse, a disused sherry warehouse on the Quayside, is going to be split up into 48 apartments, with another 86 new ones built alongside, each with a parking space, balcony and lift access (prices range from £179,750 to £495,000, available through Knight Frank, 0191-221 2211). Jasper Conran will be designing the interiors of three blocks of flats being made from an old warehouse further along the Quayside (£165,000 to £335,000 through City Lofts, 01423 506262).

"An unusual factor in Newcastle is the growing number of brand new homes in old shells," says a spokesman for Bairstow Eves, an estate agent with six Newcastle branches. "We've got such an industrial architectural heritage that's being kept, but inside there are wet rooms, loft apartments, hardwood floors and ceiling-to-floor windows. This is what you'd expect in new-build homes in central Manchester or central London."

These conversions will be just the latest steps in Newcastle's efforts to shed its poor-relation reputation.

A typical apartment now costs £125,602 according to the Land Registry. A terraced house is £151,209, a semi is £163,973 and the average price of a detached home is now a cool £321,588. These are roughly typical prices for the UK as a whole, so Newcastle no longer lags behind, as it has in the past.

With a glut of new homes on the market, local prices remained roughly static in 2005, according to Halifax. But its analysis of price rises over the decade since 1995 suggests rises of 150 per cent to 225 per cent for different house types in Newcastle. Even so, it remains much cheaper than southern England. "However, the gap is closing because of the consistently strong, above-national-average price growth over the past few years," says Chris Stonock of Halifax estate agents.

Last year, a £4m home was discreetly advertised for sale, amid much speculation as to its owner's identity. Inevitably, it was linked with Alan Shearer, the city's golden boy.

The most expensive home on sale there now is Garden House at Dissington, a six-bedroom, four-bathroom country home priced at £2.75m (available through Mike Anton & Associates, 01434 632080).

More affordable top end properties include a three-storey, four-bedroom Victorian terrace in the sought-after High West Jesmond area for £450,000, and the four-bedroom, 18th-century, detached Wolsingham Lodge, selling for £595,000 and located close to Gosforth High Street, another prestigious suburb (through Foster Maddison Property Consultants, 0191-222 1066).

Newcastle's housing market is clearly changing for the better, but nowhere is this more visible than in the city centre. Estate agent Knight Frank calculates that in 1995 just 1.15 per cent of Newcastle's population lived in the city centre; by 2005 that share rose to 2.25 per cent, thanks mainly to the development of the Quayside area; come 2015 the proportion should hit 3.8 per cent, with the firm's prediction based on the number of homes planned for the area, mostly in the form of old buildings converted into apartments.

In population terms, that equates to 9,000 people living in central Newcastle in nine years from now. It's little wonder that Newcastle is looking up - and its buzzing nightlife looks set to buzz still more.