WHEN City financiers invest, they bet on the venture that brings the highest returns. That venture is often property: a hefty chunk of this year’s £8.8 billion City bonus bonanza will go on houses. Yet the wealthiest bonus-buyers persist in following the crowd to Chelsea and Notting Hill, where prices are already sky-high. The smart financier would be well advised to turn instead to Pimlico, where white stucco mansions with SW1 postcodes are still undervalued.

Pimlico is tucked snugly between Belgravia and Westminster, bordered by the Thames, Buckingham Palace Road and Vauxhall Bridge Road. It was built as a model village in the early 19th century by Thomas Cubitt, the architect of Belgravia, and the block of streets known as the Grid (Cambridge, Alderney, Winchester and Cumberland Streets, Eccleston and Warwick Squares) is every bit as swish as its more expensive neighbour. Here paintwork sparkles, window boxes bloom and brass door knockers gleam. “It’s more central than Chelsea”, says Peter Young, of John D. Wood estate agents, “very convenient and much calmer. It’s also much cheaper. A £1.5 million house in Pimlico would cost £2.5 million in Chelsea or Belgravia.”

In Pimlico, it’s true, the smart and grubby coexist. “This shabby part of London, so very much the ‘wrong’ side of Victoria station, so definitely not Belgravia” is how the narrator of Excellent Women, a novel by the Pimlico resident Barbara Pym, put it. Pimlico is known for faded gentility: a friend who rented on Cambridge Street shared a staircase with a princess, a captain and a lord, all down on their luck.

Grubbiness starts at Lupus Street, a run-down parade of laundrettes, bookmakers and fast-food outlets. Teenagers from Pimlico school, a 1960s eyesore where Jack Straw’s children were educated, rampage, and the waterfront is dominated by council blocks. Yet even the estates have a touch of class. A sign outside the Longmoore Gardens Estate welcomes you to “Pimlico Village”, where blocks are named “ Noël Coward” and “Aubrey Beardsley”. Adam Bishop, of Hamptons estate agents, says wealthy residents dislike the council housing but not enough to stop them buying: “The idea that these sorts of buyers like a slice of real life is wrong — they hate real life. But houses overlooking the estates still sell, no problem.”

Local agents estimate that Pimlico prices have risen by up to to 25 per cent in two years, driven by lack of homes for sale and City bonus money. Rupert Dawes, of the estate agent Knight Frank, says that three-bedroom ex-council flats costing £250,000 three years ago have almost doubled in value. “That sort of investment makes much more sense than buying a basement studio flat in Notting Hill for £500,000 just because it’s Notting Hill”, he says. The area’s best addresses are Eccleston Square, St George’s Square and Warwick Square, where houses go for £4 million. But off the squares a period townhouse can be had for less than £2 million, unheard of in Belgravia.

Developers are hastily converting townhouse offices into flats and two large new developments are pencilled in for the southwestern corner: Grosvenor Waterside, ritzy apartment blocks built round an old dock, and Chelsea Barracks, which developers are now fighting over. These developments will blur the border between Chelsea and Pimlico. Typical buyers at the moment are “City workers in the second salary tier”, says Dawes. “Those with seven-figure bonuses still chase places like Notting Hill because Pimlico isn’t fashionable, but it will be in about three years. It’s the next hotspot.”

The demographic is shifting from MPs and civil servants, says Bishop, to couples and families. One example is the recent purchase, for more than £170 million, of Dolphin Square by Westbrook Partners, an American private equity firm, which is refurbishing the 1,058 flats to let. Dolphin Square, a vast Thirties block, was famed for its political and high-society tenants, including Christine Keeler, the Princess Royal, Harold Wilson and the odd Soviet spy. Now many older tenants are moving out, according to James Mannix, of Knight Frank. “It’s shifting towards a younger occupier,” he says.

Everyone agrees that Pimlico prices will keep rising. “We’ve lots of investors who can’t believe how cheap it is, when it’s so good for commuting to the City and has great infrastructure,” says Dawes. “Pimlico has further to go in terms of prices than Belgravia,” says Young. The area is brilliantly situated, with Tate Britain, the Thames, Kings Road and Belgravia’s Elizabeth Street shops within a short walk. Victoria station serves Kent, Sussex and Gatwick as well as Oxford Street and the City. Politicians can nip to Parliament within the requisite eight minutes when summoned by the division bell.

Pimlico shops leave a little to be desired, except for the marvellous Sainsbury’s Market on Wilton Road. There’s also a farmers’ market on Pimlico Road, near David Linley’s furniture shop. Khallouk and Taylor, a posh deli on Moreton Street, caters to lunching mothers (overheard: “Darling, I do love your bag, is it Mulberry?”). Churton and Denbigh Streets have nice independent shops, but nothing top of the range. “It will definitely get posher,” says Bishop. “As yet there are no smart restaurants that people would travel here for, but that will change too.”

Michael Howard lives on Alderney Street, and his wife, Sandra, recently wrote that Pimlico is “the quintessential London village. I feel as though I’m in a film about the ultimate cosmopolitan experience. Barristers, financiers and politicians live in Victorian houses that rub shoulders with large council housing blocks.” This amicable mix gives the area its charm and has kept prices down. Those with a bonus to spend are now realising Pimlico’s potential.

www.knightfrank.co.uk
www.hamptons.co.uk
www.johndwood.co.uk
www.timesonline.co.uk/investmentproperty

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