View across a pond on Hampstead Heath, north London

Flanking Hampstead Heath, one of north London’s most popular green spaces, the villages of Hampstead and Highgate are among the UK capital’s most sought-after residential locations. So broad is their appeal that the oft-paired neighbourhoods appear to come close to disproving the adage that you can’t please all of the people all of the time.

At the top end of the market, addresses such as The Bishop’s Avenue and Old Hampstead attract those able to afford homes costing tens of millions of pounds, as do properties that bound or have views over the heath. Meanwhile, a few streets away first-time buyers are equally as keen to invest upwards of £400,000 in one- and two-bedroom flats in converted Victorian family houses and former publicly owned apartments. In between, parents at all stages of the evolutionary path from baby buggy to scooter to bicycle to car are drawn by the area’s many respected schools and 3-4 bedroom properties valued from about £1m.

The spending power of the many wealthy residents has helped small, niche traders and boutiques prevent retail chains from becoming dominant, giving both village centres an eclectic appeal that seems to sit well with both the physical environment of historic buildings, cobbled streets and secret alleyways and the cosmopolitan buzz created by the many expatriates that have been drawn to the area. And the neighbourhoods’ location, on the edge of almost 800 acres of open space while also only a 15-minute Underground train journey from central London makes them appeal to fans of urban and countryside living alike.

These and other factors combine to create a market characterised by high and sustained demand and aspiration – but has this made them less likely to feel the full force of the recent property correction?

At Kenwood Place in Highgate it seems so. The development of 21 high specification apartments, offering buyers homes of 830 sq ft-3,300 sq ft in a gated complex with Harrods concierge services and within a few steps of the heath was designed by Royal Institute of British Architects Sterling award winning architect David Chipperfield, currently the subject of an exhibition at the London Design Museum. Prices for the apartments and duplexes start at £3.75m but they have sold steadily through the past year and only eight, marketed by Glentree Estates, remain available.

“This site has defied gravity,” says the company’s Trevor Abrahmsohn. “Before a brick had been laid we sold 50 per cent. Our client then decided to hold off on all marketing activity until the show flat was launched in June and we only have about 30 per cent of the scheme left. We have shattered price precedents here.”

And Glenn Taylor of sales and lettings agency Taylor Gibbs agrees. “The people buying in Highgate are not the sort who tend to get affected too much by recession. It’s more old money that people purchase with. So we haven’t really been affected by drops of prices but we have been affected, as a business, by the number of properties coming on to the market. The properties that we have had on our books have been snapped up at asking price because there are so few of them. And we didn’t suffer the same reduction in asking prices as the rest of the country. We seemed to be a bit more immune to it.”

There is evidence too from the other side of the heath. “Hampstead is a very different market to most,” explains Marcus Oliver of estate agency Chesterton Humberts’ local branch. “The house market is almost a separate entity from that for flats. In some cases you have bidders coming from all over the place for houses that don’t come on to the market often at all.”

This rarity value has, he reckons, created pockets where the recession has had no effect or reductions in values have been confined to 5 per cent.

Even this rarified environment cannot, however, remain untouched and, while not matching the 15-50 per cent contraction quoted in many other parts of London and the UK, the lower end of the market, comprised of flats and small family homes, has, Oliver says, seen losses of 10-15 per cent.

“We had a crazy period where everyone was trying to sell, people were almost panic selling and there were few buyers, but since prices have stabilised in the past six months it’s completely flipped over. Buyers have been holding out for a year and a half and now they are flooding the market. Every day we register 20 or 30, so properties that come on go under offer very quickly and we are inundated with inquiries throughout the conveyancing period.”

He is cautious, however, about seeing this buying frenzy as the beginning of a return to normal market conditions, as many of his purchasers are still people in a relatively privileged position.

“I’ve been absolutely amazed by the percentage of people who are cash buyers – no mortgage necessary at all – and the number of cash-rich foreign buyers – at least 50 per cent of people. And those with large down payments are cashing in as well. Property is cheap and for those with large deposits borrowing is cheap too. I think we must be seeing a lot of first-time buyers who don’t have a deposit themselves but whose family have a bit of money or whose parents have some savings. If it’s sat in a bank it’s earning virtually no interest so a lot of people are being helped out by family.”

Yuri Bobrov, 46, a Russian linguist and translator for a banking institution who has lived in London for three years, finds himself in the midst of the current volatility. He and his wife, Anna, plan to leave their rented home in Hampstead to move to a one-bedroom, second-floor apartment they are buying in Highgate.

“The upside of the economic situation is that at least in this area prices have stopped to grow for some time. Spring was the moment [to buy],” Bobrov says. “On the other hand, I had to remortgage my previous place in another country to provide virtually half of the sale price. The English bank was only able to provide me the other half – it could not give me a more substantial proportion because the price of the loan would be prohibitive.

“By the end of spring the stock of properties started to dwindle – anything that was worth buying lasted, I think, a week on the market. I tried to negotiate the price of the property I’m buying down but in the end I just decided to accept the selling price.

“I started looking at Hampstead but at the time it didn’t offer anything in my price range, so Highgate was to me the second best solution. Being familiar with the place is a very important consideration because you don’t want to change your habits. Ideally I would like to remain on my current street but there you just don’t find anything like a two-bedroom [flat] below half a million pounds.”

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Estate agencies
Glentree Estates, tel: +44 (0)208458 7311, www.glentree.co.uk
Chesterton Humberts, tel: +44 (0)207794 3311, www.chestertonhumberts.com
Taylor Gibbs, tel: +44 (0)208341 0123, www.taylorgibbs.co.uk

Development
Kenwood Place, tel: +44 (0)203213 0019, www.kenwoodplace.co.uk