A room with a view please, and I'll pay in hard cash

What is the price of a river view? About 20 per cent over the odds in the current market. Yet "outstanding view of the river" can mean a vista of used condoms, lumps of wood and plastic carrier bags, swirling around in thick mud.

So why the appeal? Maybe it's the sense of escape and adventure, as the river courses its way unstoppably towards the open sea. Except that it's not only rivers that generate gushing descriptions from estate agents. Basins, wharves, canals - any waterside home commands a premium. What we're paying for is open space, in the same way that we're willing to pay extra for a home that backs on to parkland. The difference with a stretch of water is that it will never be developed.

Since the upturn in the market, Hamptons International has found the demand for waterside properties so great that the company now has a department specifically for such homes in the south of England. "A river view can be regarded as a luxury and will command a lot more per square foot as a result," says Phillip Stevens of Hamptons. "The market is fickle - luxuries are put aside in a recession - but in a strong market, any feature which sets a property apart will attract a premium."

As a result, developers are crying out for land with anything remotely watery close by. "There's already talk of building bridges with houses on them," says Geoff Marsh of London Residential Research (LRR). "This kind of scheme surfaces in a bull market but is unlikely ever to happen."

The Thames in particular is being priced out of reach as more and more land is snapped up for luxury developments, and the demand is causing friction. A battle is underway over Hermitage Riverside, a prime site in Wapping, east London, where developers want to build homes and campaigners want a memorial park for London's civilian wartime casualties. For a taste of battles to come one only has to look east to the Isle of Dogs where development of luxury housing in the 1980s upset locals, mostly council-house residents. They found pathways along the river barred by iron gates, suddenly entrances to private estates.

The decline of London's docks is still the principle source of development land in the capital. Regalian has two developments in Docklands, Atlantic Wharf and Premiere Place. Both have two-bedroom apartments of similar specifications, but Atlantic Wharf has one of the best views in east London, on the convex bend in the river. The difference in price is around pounds 50,000.

According to LRR there are 19 riverside developments currently under construction and 20 in the planning system. This is despite the fact that the capital's waterways have been described as an important part of our heritage, to be protected at all costs. In February, John Gummer, then Secretary of State for the Environment, announced a new policy to protect riverside sites still in industrial use. The developers bide their time.

It is not only the British who like British water. Phillip Stevens of Hamptons points out how well these projects sell in Asia, particularly to the Chinese. "The Chinese drag their superstitions into property purchase and water is considered to bring good luck," he says.

Not all developments need this help. The landmark development of the old ice-rink in Richmond has had no need to look outside the UK for buyers. Over 80 per cent of apartments and townhouses in the Richmond Bridge development have been sold off-plan with completions still 15 months away.

But then Richmond has scenery as well as the river. Further east the view is not always so pretty. In Docklands, the consensus is that on the north side of the Thames you get a delightful flat but a rather grim view; on the south you have a magnificent view, thanks to the stunning developments on the Isle of Dogs, but a less desirable property. "Generally speaking, the further away from Canary Wharf you go, the more bland development becomes," says a spokesman for LRR. "That is a pity, since excellent riverside sites remain undeveloped."

There is growing resistance to this trend, of unimaginative, anonymous new development which makes places seem "just like everywhere else". A "bland" development of Europe's finest listed warehouses at North Quay, Isle of Dogs, is being opposed as "dull and uninspiring".

Some waterside areas have been lost completely. Tower Hamlets council, anxious for land for needed housing, filled in the Western and Eastern Docks, but this is unlikely to happen in the future. "Over the past five or six years, developers have really woken up to the value of water," says Mark Bensted of London's Waterways. "London's canals attract some 10 million visitors per year - anglers, cyclists and walkers."

On Regents Canal, Marina 1 is a development at Kings Cross overlooking Battlebridge Basin and further upstream the prices rise, at Gilbey House, Camden Lock. There is very little commercial activity left on the canal apart from pleasure boats and the odd floating restaurant. A gentle procession of colourful narrowboats hardly causes much disturbance. But the Thames was once the main thoroughfare in London and not that long ago was the most polluted river in Europe. If London's roads become so congested that the traffic spills back into the canals and rivers, a waterside home may no longer be so peaceful.