A DREAM home isn’t always a country cottage with roses round the door. For many, heaven is a futuristic penthouse flat in one of the new developments reviving the dock areas of Britain’s once great industrial cities.

Building high-density housing on brownfield sites is a government priority: three million new homes by 2020 is the latest target. But, in a Times poll of estate agents (see page 4), new city-centre apartment blocks were singled out as especially vulnerable to expected price falls, because of oversupply, optimistic pricing by developers and falling rental yields. It remains to be seen whether a postindustrial docklands flat will be a desirable investment or a depreciating asset in 2008.

In the first of a Bricks and Mortar series on docklands regeneration, we look at Glasgow, a city confident that investment in the 2014 Commonwealth Games will insulate against tough times ahead. “In the five years leading up to the 2002 Games in Manchester, house prices in the city centre rose by 102 per cent versus a 52 per cent rise in the North West,” says Martin Ellis, chief economist at the Bank of Scotland, who expects the same story in Glasgow.

The great city of tobacco lords and empire-builders is emerging from a dark spell. According to Glasgow City Council, the manufacturing industries which were the city’s lifeblood suffered a 90 per cent decline between 1950 and 1996 and today account for fewer than one in ten jobs. But jobs are being created in the service sector and unemployment has dropped to 8.8 per cent from 15.6 per cent in 1996. The population rose last year for the first time since the 1920s. In 1991, 60 per cent of the city’s housing stock was council-owned. Today 60 per cent is in private hands. The housing market has flourished, with the average house price rising 18 per cent last year to £169,474, according to the Bank of Scotland. The price of a flat has soared 193 per cent in ten years, to an average £138,425.

Cranes compete with Neo-Classical domes for dominance of Glasgow’s skyline; 23,242 new units are to be built in the city centre, says Savills. In the Clyde regeneration area, 741 acres of docks and shipyards are being turned into a live/work development. Since 2000, 2,100 new homes have been built; 3,000 more are proposed. The council expects £5 billion more investment over the next ten years. The site is ideal – next to Glasgow’s West End, a 15-minute cab ride from the airport and a 10-minute tube trip from the city centre. In Glasgow Harbour, a 130-acre riverside stretch between the Clyde Tunnel and the Scottish Exhibition and Conference Centre, 649 one to four-bedroom flats have been built by Cala, Park Lane and Bryant Homes. Phase two or “gh2o”– 770 flats over five towers and three low-rise blocks – is the work of the developer Dandara on a site where the first steamship was built in 1812.

The 282 flats in the first phase were launched in March 2006 and have been selling at a rate of 15 a month; 25 flats are still available, from one-bedrooms at 476 sq ft and £157,950 to a 1,017 sq ft, two-bedroom penthouse at £425,000. This last is the definition of industrial chic – from the glamorous (though windy) private roof terrace the views of a working naval shipyard (BAE Systems’ Govan yard is to build a new aircraft carrier ordered by Gordon Brown for the Royal Navy) opposite are fascinating. This is old and new Glasgow rolled into one. From the ground level walk-way one can see the Oban seaplane landing on the Clyde, the “Armadillo” centre, and the Clyde Arc, or “squinty bridge”.

“We have lots of first-time buyers because studios started at £89,000, whereas the lowest price in phase one of Glasgow Harbour was £160,000,” says Alison Marchetti, of Dandara. Owner-occupiers make up 62.5 per cent, but investors have also enjoyed three price increases in phase one alone. Dandara will furnish a flat (from £3,000), let it, and for two years guarantee returns of £600 a month for a one-bedroom flat and £700 for a two-bedroom, more than £100 better than the city average. Phase two of 189 studio to two-bedroom flats in 25 styles will launch in January, from £105,950.

Gh2o has a better chance than most new-build apartment blocks of holding its value. Scottish house prices are forecast to grow next year, the Games will provide extra confidence, and Glasgow’s former docks are unusually well-connected to the city centre and new business districts. “Buyers are attracted by the shipyards,” Marchetti says. “They are a big part of our identity and history.” It’s a winning combination of modern living with an industrial heritage of which Glaswegians are rightly proud. www.dandara.com/gh2o , 0800 0087008

For a guide to where’s hot and where’s not in Scotland, go to: timesonline.co.uk/scotlandproperty

CASESTUDY

Nicola Blackwood, 24, a quality assurance specialist, and Graham Walker 23, an engineer, left, bought a two-bedroom flat in the gh2o development, right, in May for £178,000. As first-time buyers, they looked first at Victorian tenement flats. “They’ve lots of character”, says Blackwood, “but they’re so expensive. Buying new was sensible, we got a lot for our money.” She is upbeat about Glasgow’s future housing market: “Spirits have risen with the Commonwealth Games win; there’ll be lots of investment in the city.”

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