In the Sixties, The Australian pub in Milner Street, Chelsea, was a meeting place for miniskirted “dolly birds” with cut-glass accents and “debs' delights”, young upper-class men kitted out in velvet flared trousers from the boutiques of the nearby Kings Road.

In 1963 the Rolling Stones posed outside, left, looking young and engagingly toothy, but trying hard to exude classlessness and cool in the earlier Mod style. This slightly dangerous rock'n'roll edge only added to the allure of The Australian for the social group that later would be classified as Sloanes. The recent transformation of this hang-out into a glamorous interiors shop with two swish flats above highlights the changes since the Swinging London era.

The term dolly bird did not survive the arrival of feminism; and debs' delights - chaps with good but undemanding jobs - have been replaced by hedge fund managers who work all day and most of the night. It also exemplifies shifting trends in the property market, within the capital and without. The increased supply of property for sale and to let is allowing prospective purchasers and tenants to be extra-fussy about decor and price.

At the height of the boom, pubs in smart postcodes were worth much more as residential premises than as places to raise a glass or two. In 2006, The Australian, a handsome 19th-century building, was acquired by Helen Green, the interior designer, and Harry Parshall, her husband. After an extensive renovation and the excavation of the basement, the ground and lower-ground floors now house Green's showroom, where her furniture collection is displayed, and the offices of her design consultancy. In this slick, airy structure, no trace remains of the pub - neither a whiff of Marlboro cigarettes nor of light ale.

The upper floors, once accommodation for the pub's staff, have been turned into two rental flats, designed by Green's consultancy. The first flat has already been let; the second, a three-bedroom maisonette, whose floors are connected by a specially constructed spiral staircase, amp;#33;below right, is now available at £2,700 a week through Knight Frank.

The property's features include black American walnut flooring in the reception areas, a Miele kitchen, air-conditioning and underfloor heating. A carefully positioned skylight means that there are no dark corners in the hallways. From the rear windows there are views over Lennox Gardens Mews, providing the Victorian element that so pleases rich foreigners who settle in London - Dickensian, but without the grime.

The mews was built in the 1870s, on the ground where the first cricket match between England and Australia was held. The Australian acquired its name from this event.

The immaculate finish of the flat typifies what the person who can afford £140,400 a year on rent is looking for, according to Lisa Kennard, of Knight Frank's Knightsbridge office. She finds that many prospective landlords remain unaware that tenants can now pick and choose and need not tolerate the shabby or the chipped. Tenants who can afford £270 a week may not be able to insist on American walnut. But the new, easier availability of rental properties means that they are beginning to turn up their noses at such things as poorly laid MDF flooring that is beginning to warp. They may also soon start to sniff at decor that goes beyond neutral to bland, if, as is normally the case, a change in taste trickles down from the domestic environments of the rich to the reception rooms of Middle England.

Kennard reports that tenants in Chelsea are beginning to regard an overpreponderance of beige and taupe as unimaginative - previously these tones were the essential element of an upmarket interior, the aim being to create a space as similar as possible to a deluxe hotel room. In the Milner Street flat, Green's team has created a style that, although streamlined, owes little to the aesthetics of a Four Seasons suite. Taupe is tempered with chocolate and lustrous blue-greys, chic but cosy. The furniture is sleekly modern without being overly minimalist, again in the attempt to create a home - which is what all tenants want in these uncertain times.

Top Tips for landlords

Be realistic about the letting price: the pace of growth in rents is slowing

More tenants are now making a decision on what they see on their first viewing; the promise of improvements in the future may count for little.

The property must be spotlessly clean and the decor and furnishings impeccable; remove worn items. If a power shower will get you a tenant, install one

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