Hoxton: the party's over

If nineties Britain has a demi-monde, it inhabits a shaky orbit around the two square miles of Shoreditch, east London. But for the close- knit community of young and broke artists, musicians and designers who have made the muddle of warehouses and factories a byword for bohemian life, the party may be over.

Shoreditchers have been the darlings of glossy style mags, their grungey, nocturnal life London's answer to the Left Bank. Now they are becoming victims of their own success. Serious money and a string of celebs are moving in, and locals fear that their way of life will be crushed in the fashionable stampede back to inner-city living.

Situated just north of the City, Shoreditch was largely overlooked by developers in the Eighties boom. While glitzy new offices and shops sprang up nearby to cater for the Loadsamoney generation, the "Ditch Triangle" - already home to a long-established network of artisans - became a haven for the Nomoneys, creative types lured by huge, low-rent spaces, typically entire floors of disused factories, in which to live, work and, most importantly, play all night.

Around 1,500 people now live in the area, many paying as little as pounds 60 a week for the share of a giant floor area or pounds 100-pounds 150 for room to work in as well. At weekends, however, they are joined by an equal number of "outsiders" seeking fun till dawn at any one of half-a-dozen large-scale parties.

Among those drawn to the area have been Givenchy's new fashion guru Alexander McQueen, whose London office is in Hoxton. Latest recruit to the growing band of celebs is media intellectual Michael Ignatieff, who has just abandoned leafy Highbury for a flat in a converted factory just off City Road.

Commercial developments are helping to tighten the noose. On the southern fringe, at Spitalfields, the new London International Financial Futures and Options Exchange is to be built, bringing in as many as 12,000 staff, while on its northern edge at Old Street, Hackney Council is likely to give the go-ahead for a new 216-bed Holiday Inn Hotel and "improvement" of the surrounding area. Meanwhile, shabby industrial buildings continue to be converted into chic apartments costing up to pounds 500,000.

The locals aren't happy. "People are now buying, not renting. Now you see people walking around with notebooks looking for flats to buy. One of the best things about living here is that the flats are cheap and large enough to accommodate spontaneous parties," says Mole, 31, who manages a band.

"You're actually part of big community here, but you wouldn't know it. Just in the pub or at a party, you can meet, say, a glassblower, or a jewellery designer. But if we don't do something soon, we've had it."

It may be too late. Philip Jackson of estate agents Stirling Ackroyd says business is booming. "Recently our emphasis has switched from commercial use to residential - a new wave of successful, creative people are moving in. For example, we've just agreed terms on a 2,400sqft loft apartment for pounds 300,000 and the area is already smartening up."

But people have lived and worked in Shoreditch for years, inheritors of a tradition of small-scale, crafts-based industry that stretches back to the 17th century. David Boswell, 32, an antique furniture restorer, has lived and worked in the area for six years.

"There is a degree of latitude and flexibility that makes it an excellent place to live," he says. "If it becomes residential, it will kill off the life. I'm facing a huge rise in rent if that happens, and I'll have to move out. We all like to party a bit too ... in fact, we party all the time - that's what we do."

Or did. According to Mike New of the Borough of Hackney, which covers much of Shoreditch and is backing plans to renovate the area, change will come sooner rather than later." The key is not to disrupt employment opportunites and the local economy. The last thing we want to do is put pressure on people living in Shoreditch, but because of market forces, some pressure [is] inevitable."