What a difference a Tube makes

London Underground's big project is pulling property developers behind it. By Serena Holley

"Within 10 minutes' walk of a Tube station" is as much a part of London estate agents' patter as "immaculate period features" and "superb shopping facilities".

Edwardian estate agents were probably saying much the same in 1904 when the Metropolitan Line reached Uxbridge. The line is a perfect example of how the Tube map dictates property development; the Metroland suburbs, stretching north-west out of London, are a result of its expansion. By 1939 the Metropolitan Railway Company had built 4,600 homes as far out as Amersham, creating thriving new communities.

The property industry is hoping that the same effects will be felt along the route of the extension to the Jubilee Line which opens in 1998. The pounds l.9bn 10-mile extension, running from Green Park in the West End to Stratford in the east, will for the first time connect south-east London by Tube.

South London, starved of public transport, has only 28 stations out of the 270 on the Underground. The Jubilee Line extension will add a further six. It will also stop at Waterloo and London Bridge. East London will benefit with the Isle of Dogs served by a new station at Canary Wharf, and another at Canning Town.

Yet while the Tube is important it is not a cure-all. What the Victoria Line did for Islington it singularly failed to do for Stockwell. Tony Travers, at the London School of Economics, says: "Tube lines cannot be expected to improve an area on their own. Other factors, such as economic trends and the attitude of local authorities to development are just as important."

What a Tube line can do is to tap into existing attractions.

The London Borough of Southwark will have two new stations at Southwark and Bermondsey. With its slice of river bank and proximity to the City, the area was hyped in the Eighties yet never quite happened. Now it is fashionable again with developers.

Bankside Lofts, launched in May, is London's most high-profile residential development. Manhattan Lofts, the developer, is converting a Victorian warehouse and Fifties office block near Blackfriars Bridge into 130 lofts, at prices ranging from pounds 99,000 to pounds 650,000. The Bankside Power Station is set to become home to the Tate Gallery of Modern Art. There are only five lofts out of 24 left in the scheme's first phase. The brochure makes much of the Jubilee Line.

Michael Shiel, an architect, has bought a 900sqft shell which he and his wife, a designer, are converting into a two-bedroom loft. "What attracted us was the location and the chance to do our own fit-out in an exciting development. The extension is important as it's going to open up the east and west of London to us."

Southwark's planning department has seen an increase in inquiries and a doubling in land values for sites near the new stations, especially those north of the route with a river view.

Nearly 30 developers showed interest in Adlards Wharf, an old warehouse near the new Bermondsey station with scope for conversion into 50 apartments. A shortlist of four has been drawn up, something that would not have been necessary three years ago.

Shad-Thames, east of Tower Bridge is now wall-to-wall merchant bankers. Proximity to the City is the bait but the extension will be a useful extra. Frogmore Estates recently bought the remaining commercial properties and land for residential development in Butlers Wharf. (Cluttons currently values a three-bedroom flat with a river view in the Butlers Wharf Building at pounds 435,000, compared to pounds 300,000 in April 1993.)

Two minutes' walk from the new Bermondsey station, Berkeley Homes has bought Jacobs Island to build 200 homes there. Glyn Hopping, the company's land director, says: "For us the Jubilee Line extension is a definite selling point."

Further east in Surrey Quays the rumour among buyers is that the new Canada Water station will put prices up by an average of pounds 5,000.

Eric Sorensen, chief executive of the London Docklands Development Corporation, says: "The Jubilee Line extension is going to have a very significant impact."

While Greenwich is an established residential area, it is relatively cut off. The opening of both the extension and the Docklands Light Railway extension to Lewisham in 1999 will change that. The new station, on the Greenwich Peninsular, is a two-mile walk from central Greenwich but there are plans for a light-rail or bus link. British Gas is applying for planning permission for Port Greenwich, a 300-acre scheme around the station to include 1,000 homes and a 100-acre leisure park.

The Jubilee Line extension will boost property but only in areas with other attractions. Southwark with its proximity to the City, Docklands with its businesses and historical Greenwich could be the happening areas of the next century. Canning Town may have to wait.