Prime property in southwest London is rising strongly from the ashes of the recession, with price growth of 8.4 per cent in the third quarter of 2009. This is more than twice the Central London rate and comparable to the rate of growth at the height of the market in the first half of 2007, according to Savills. But these figures apply mostly to large Victorian family houses in the smartest parts of Fulham, Wandsworth and Richmond, proving that people still want to buy nice old homes in established areas. New developments, however, are a much trickier proposition.

New-build properties are vulnerable in a recession, when the few buyers around are risk-averse and inclined to stick to tried-and-tested investments. The premium attached to new property also means that the resale value is less reliable than that of period property. Therefore, developments even in sought-after southwest villages such as Battersea and Clapham were not immune to the downturn and work on several sites ground to a halt last year.

Battersea Reach, the latest riverside towerblock from St George, was built to schedule, but no buyer has yet been found for the £8 million luxury penthouse flat on the 15th floor. The £80-million revamp of Clapham High Street has been stuck in planning for more than a year, and the application for two 40-storey residential towers above Clapham Junction was turned down in May, to the relief of locals. The redevelopment of Battersea power station looks more promising after the Mayor of London, Boris Johnson, agreed last month to divert money from Crossrail to help to fund an extension of the Northern Line to Nine Elms.

Smaller developments, spurred on by increased bouyancy in the second-hand market, are now quietly pressing ahead, but without 2007-style champagne-fuelled launch parties. The Lumiere development at the top of St John’s Hill, Battersea SW11, is a test case, partly because of its very visible location, looming over Clapham Junction, Britain’s busiest railway station.

In September last year, Hamptons International, agents for the project, told Bricks&Mortar that the Henley Homes development of 59 one and two-bedroom flats would be completed by Spring 2009. Today, the former Granada cinema is still very much a building site. “We’ve dropped back a year,” Richard Pine-Coffin, of Hamptons, says. “Completion will now be in Spring 2010, because of the credit crunch affecting financing and concerns about sales.” He estimates that prices initially dropped by 10 per cent, but that “one-beds are almost back up at their original price now”.

There are 19 flats available. One-beds range from 439 sq ft at £265,000 to a 800 sq ft duplex penthouse with two terraces, priced at £705,000 and kitted out with orange suede walls and funky egg-shaped bathroom fittings. Two-beds range from 632 sq ft-1,006 sq ft and from £370,000-£705,000. One of the most expensive was reserved at the asking price last weekend. It’s a fantastic site in terms of views (especially for trainspotters), and there is a 12-seater cinema-room for residents. The original Grade II* listed cinema auditorium has been leased to a Nigerian evangelical group for use as a church.

The Ipsus02 development at Wingate Square, a prestigious site in Clapham Old Town (SW4), is also running behind schedule. A launch date of summer 2008 was quietly dropped, attributed by the agent at the time to “internal political difficulties with the developer”, rather than the credit crunch. Pine-Coffin now says that “it was on hold waiting for the market to pick up and to get development finance”, and that “it has now been back on track for four months”. The flats are arranged in four blocks round a public square; 101 have now sold, and a similar amount are being “held back indefinitely”.

The last apartment to go on sale is the penthouse showflat, priced at £1.25 million. It has a 1,259 sq ft terrace which wraps round three sides of the building. Hamptons claims that this is one of the largest terraces in London. It certainly has plenty of space for lounging, eating, gardening and people watching. Inside is very modern, with stripey bamboo floors and an iPod dock on the living room wall. The two main bedrooms are en suite and lead on to the terrace. A third room off the living room could do as a single bedroom or study.

“There is an element of a statement about this flat,” Pine-Coffin says. “The buyer will be a young professional couple or single guy. It’s no good for kids.” Indeed. For the same price, a family could buy a five or six-bedroom Victorian house in Abbeville Village near by.

Ipsus is nothing if not game, however. In summer 2008, when IpsusO2 was failing to launch, it gamely started work on IpsusO3, an attractive new-build gated mews off Cabul Road, in the area just south of Battersea Park Road known as Little India. Five two-bedroom houses are available, at £590,000 (1,089 sq ft), as are two three-bedroom properties at £725,000 (1,234 sq ft). Just one four-bedroom, 1,633 sq ft home is still for sale — at £1.1 million. Two-bedroom flats are for sale from £410,000.

The development won two awards last week for its clever use of space in a tight site. To make the most of the light, the houses have an upside down layout, with bedrooms on the ground floor and loft-style living space upstairs. These rooms are very modern and minimalist, and have glass doors leading on to a tiny terrace. Each house has underfloor heating and an integral garage. The four-bedroom house is detached, apart from the garage, with a conventional layout and a triangular garden which is rather overlooked.

There is one serious flaw — the whole development backs on to a railway line used by the Clapham Junction to Watford Junction shuttle service, which operates three trains an hour between 5am and 11pm, as well as some freight. All windows at the back of the development overlook it, and it runs very close to the kitchen windows of the flats, which are in a block at the entrance to the mews. Bedrooms here are dark. Despite these drawbacks one has already sold, as have two of the two-bedroom houses.

These buyers clearly like the security of a gated development and are prepared to pay a premium for new-build, because the pricing is punchy. The two-bedroom houses are the same size and price as three-bedroom Victorian houses on the neighbouring streets. The £725,000 price tag for an Ipsus three-bed is the same as that for a smart Victorian four-bed of the same size on nearby Knowsley Road, next to another railway line.

A buyer for the £1.1 million four-bedroom house would have to be very keen indeed on the security, as a larger four-bedroom period house is currently available on Broxash Road, between Clapham and Wandsworth commons — a much smarter area than Cabul Road — at £995,000. If the Ipsus house sells at the asking price, we can safely say new-build is back.

Contact: Hamptons International for all properties: 020-7758 8488

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