There has always been a lot of snobbery about London postcodes: SW1 (Belgravia) has traditionally been well-to-do, and is now exceptionally well off; W1 (Mayfair) was always smart; and, since the mid1990s, W11 (Notting Hill) has become achingly so. But W2 meant you lived “north of the park”, and too far from Harvey Nicks.

Despite its central location, Bayswater, a pocket of Regency houses, Victorian terraces and 1930s blocks sandwiched between Belgravia and Westbourne Grove, has never made it into the premier league. Hedge-fund managers shun the place, speeding west to Holland Park or north to St John’s Wood. It is politely referred to as “cosmopolitan” – meaning close to the cultural melting pot that is the Edgware Road. Its reputation was one of shabby hotels and seedy bedsits: less ladies who lunch, more ladies of the night.

After a series of false starts, however, that appears to be changing. The scuffed and peeling stucco exteriors are being repainted and a gloss is being put back on the 19th-century terraces that were once home to the grandees of the Establishment. Jimmy Choo has opened a store in Connaught Village and other boutiques are moving in.

Local residents include Tony and Cherie Blair, who bought a five-bed Georgian house on Connaught Square in 2004 for £3.65m (together with the neighbouring mews house they later bought for a reported £800,000, it is now valued at about £5.75m); the super-model Claudia Schiffer and her film-producer husband, Matthew Vaughn, who are cosied up in Palace Court; Ilaria Bulgari, the Italian jewellery heiress; and Sally Croker-Poole, the former wife of the Aga Khan.

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The triangle of streets north of Hyde Park is vying for the same prime status – and prices – as its more illustrious neighbours. But can Bayswater really be the new Belgravia? “The area has always been something of a bridesmaid, never the bride,” says Charlie Smith, director of the Mayfair office of Sotheby’s International Realty. “It’s a shame, as there are some really nice houses.”

Few are nicer – or, rather, more spectacular – than 12 Hyde Park Gardens, a 9,362 sq ft maisonette that spans the raised ground and first floors of a white stucco-fronted terrace. It has its own marbled entrance, with trickling fountains, silk-lined walls and chandeliers, leading into a double-height hall with stained-glass windows. The property is as impressive as any on the other side of the park.

The price of £18m may seem a lot for a maisonette, but it is a third less than an equivalent home would cost on Chester or Belgrave Squares. The owner, an elderly Saudi sheikh, is throwing inthe contents – including four-poster beds and a gold-and-cream chaise longue.

Though the Moorish-inspired grilles, wrought-iron doors and decorative faux marble will not be to everyone’s taste, Smith says that there is no shortage of potential buyers ready to pay as much again to rip everything out and start afresh, a process of “superfication” – upmarket gentrification – that has pushed up prices in Bayswater by 40% since January.

“It’s the first time developers have contemplated one-off projects on this side,” Smith says. “The sale is attracting big names from Kensington and Mayfair, who are considering the area for the first time. You are central, you’re near the park and you can get a lot more for your money than a skinny townhouse on, say, Belgrave Square. We have a Swiss oil millionaire interested in buying everything, lock, stock and barrel.”

Elsewhere, Bayswater is seeing other large developments targeted at the super-rich. One of the largest is the Lancasters, on the site of the Grade II-listed former Thistle Hotel on Lancaster Gate. Northacre, the developer, is hoping it will have the same effect on prices that the Phillimores, another of its development, had on Kensington, or that the Candy & Candy-designed One Hyde Park is having on Knightsbridge.

Construction of the 77 flats, ranging from one-bedroom flats to duplexes and penthouses, began in the summer, but Northacre will not announce prices until January. “Bayswater has suffered something of a stigma since the war, but the Lancasters will change that,” says John Hunter, the firm’s director. “It is one of the largest stucco-fronted terraces of its kind in central London, with 220 windows facing Hyde Park. It will give an impetus to prices.” Robert Bailey, director of the eponymous buying agency that hunts down homes for the very rich, agrees. “It’s been a hot tip for a long time. Once something of an ugly sister, it is being boosted by the Marylebone effect on one side, the Notting Hill spread on the other, and the view of the park. It is becoming sexy.” The prices of existing properties, meanwhile, are soaring: a family house that would have cost £1.85m last year would now fetch £3m.

Dick Ford, head of London residential for the Knight Frank agency, says that Bayswater has the same rundown charm the Upper West Side, New York, used to boast. “The area west of Central Park was regarded as arty and cheap,” he explains, “and the moneyed set used to head to the Upper East, but then John Lennon and Norman Mailer went west. It got fashionable, then it got expensive. The same is happening to Bayswater.”

It may never be the bride, but it looks as though W2 is starting to cohabit.

12 Hyde Park Gardens is for sale through Sotheby’s International Realty; 020 7495 9580, www.sothebyshomes.com. Knight Frank; 020 7629 8171, www.knightfrank.com. The Lancasters; 020 7402 8822, www.thelancastershydepark.com. Robert Bailey Property; 020 7352 0899, www.robertbaileyproperty.com

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