First to profit with houses on the line

Estate agents are calling it the Halo Effect. It's the golden glow spreading out from each planned new station on the soon-to-be-completed pounds 2.6bn Jubilee extension. Connecting East London to the West End, it will bring Southwark, Bermondsey, Docklands and Greenwich out of the property hinterland, provide four cross-river links and make it easier for Essex commuters to reach Docklands via Stratford.

Should you think now is a good time to buy in those areas to make a quick killing when the line opens in March 1998, forget it. You're too late.

"A lot of that's already happened," says David Bezer of Greenwich and Blackheath agency Skitt & Co. "Docklands is filling up and we are seeing a different breed of applicant here now. Until recently, we've always been a bit of a poor relation to Hampstead and Highgate where prices have traditionally been a third higher." The roads within walking distance of the Greenwich North station are already commanding a premium. A former seaman's two-up, two-down cottage off Trafalgar Road would have cost pounds 90,000 last year. This year, you'll be lucky if you find one for pounds 100,000.

"A good four- or five-bedroom Georgian terrace house will go for pounds 450,000," says Mr Bezer. "In fact, I sold a virtually derelict Georgian house in Blackheath recently for pounds 500,000."

There are precedents. The extension of thhe M40 to Birmingham brought a boom in prices in Oxfordshire Warwickshire and the south Midlands.

"In London shortly after the Victoria line stretched to Pimlico several years ago, prices there increased by at least 10 per cent," says Simon Coan of Winkworth in Kennington. "We expect a similar situation to occur in Kennington - already popular - and when the Jubilee line stretches to Southwark, increasing numbers will be drawn there because the West End and Docklands will be only a short ride away."

Once the line is open, it will be a 22-minute journey from Stratford to Green Park; nine stations will interconnect with mainline stations. It is, says London Underground, the most important addition to the network in 25 years.

Bermondsey is already benefitting from the station, not yet completed. People like Zandra Rhodes and Alexei Sayle have already earmarked their new homes in an area which has undergone a remarkable transformation. Faint traces of the old leather and hop exchanges remain as faded names on warehouse buildings, but junk shops are now antique shops and factories are now loft apartments. At Tyers Gate in Bermondsey Street, J & K Builders is offering a new development of six shell apartments and one penthouse - opposite the proposed site of Zandra Rhodes' fashion museum - at prices starting at pounds 124,500 and rising to pounds 195,000.

Sales have already been agreed on four. A car parking space costs a further pounds 6,500. Buyers are offered a free consultation design package, with suggestions on materials and finishes, but can have the builders finish off the flat at extra cost. Walls are finished ready for decorating, structural steel work boxed in and plaster boarded, and services to each flat capped off. Putting in your own kitchen and bathrooms could cost a further pounds 20,000.

Knight Frank is confident of getting pounds 250,000 for a two-bedroom flat at Bermondsey Wall: it's the last one left and has views of Tower Bridge.

At Canada Wharf in Rotherhithe Street - just across the Thames from Canary Wharf - half of a 46-flat development of loft-style flats sold within days of being launched in September. Now only 12 are left in the warehouse conversion, starting at pounds 92,500 for a one-bedroom apartment with terrace to pounds 350,000 for a three-bedroom flat with balcony and river view. Canada Wharf was built in the 1890s as a timber wharf and is now Grade II listed. It sports a Japanese courtyard, for which artwork and sculptures have been commissioned.

House hunters looking for a fashionable address are not the only ones being drawn in. Investors have moved in, too.

"Some purchasers are buying as a rental investment," confirms Tom Farrelly of Winkworth at Surrey Quays. "When the Tube links the area to central London, a notable boost to their returns will be virtually guaranteed. We sold a two-bedroom flat in Brunswick Quay for pounds 74,000 where the owners will comfortably achieve pounds 650 a month in rent: that's a gross annual yield of more than 10 per cent."