Centre stage

Soho has long been considered one of London’s most fashionable and best-located residential enclaves, but always less well regarded than adjoining areas such as Mayfair, Covent Garden and Bloomsbury.

The area has just 6,000 residents and is bounded by four “Circuses” – Oxford and Piccadilly on the west, St Giles and Cambridge on the east. Within its boundaries are well-known theatres, clusters of bars, cafés and restaurants, and the rare reminder of its history as a red-light district.

Over the centuries, Mozart, Marx and the Sex Pistols lived in apartments above shops, pubs or offices lining its 40 or so small streets. From the 1930s the area was home to risqué revue bars and strip clubs; in the 1970s a Chinatown was created on the other side of Shaftesbury Avenue.

Stricter enforcement on sex and alcohol licensing led to the closure of many businesses, and in recent years the area has become dominated by high-end restaurants and small creative enterprises such as film and TV post-production firms.

Now, however, a more dramatic and high-speed transformation is underway, prompted by three factors. Firstly, the Crossrail project – a £15.9bn rail scheme through Greater London and beyond, due to open in 2018 – will have a major interchange at Tottenham Court Road, in Soho’s northeastern corner. Buildings in several nearby streets have already been demolished to make space.

Secondly, there has been a surge in office-to-residential conversions, where existing offices have been deemed too old to be modernised for contemporary commercial use. Amazon Properties is converting the six-storey Paramount House in Wardour Street, Paramount Studios’ former London base, into 15 upmarket apartments. Meanwhile the Resolution Property Group is working on the Quadrangle Building on Wardour and Oxford streets: it will retain current office and retail uses but with two residential floors on top.

Thirdly, Soho’s hitherto-distinctive retail offer has changed. Charing Cross Road has fewer bookshops; the music and clothing stores for which Berwick Street was renowned are now struggling. And some independent cafés in Frith and Old Compton streets have been replaced by coffee chains.

Some locals believe the area has lost distinctiveness. Chef Aldo Zilli has closed two restaurants, accusing chain shops of making the area “like Dubai”. However, residential analysts such as Ben Stroud of Jones Lang LaSalle say the changes make Soho desirable for buyers, providing “London’s most attractive capital growth prospects in the coming years”. His firm says prices have been kept artificially low by long-term uncertainty over Crossrail. Estate agents now claim the certainty of a fast link to the City and Docklands – 13 minutes from Tottenham Court Road to Canary Wharf – will finally unlock Soho’s residential potential.

“According to several reports, capital values will see a potential increase of 40 to 50 per cent once the works have completed,” says Guy Passey of estate agency EA Shaw.

Yet there are problems for would-be residents caused by the small footprints of properties as well as noise from bars and clubs. “Units are small because the architecture doesn’t allow the lateral spaces now in vogue,” says Marcus Bradbury-Ross of Prime Purchase, the Savills-owned buying agency. He believes the area cannot match the appeal of nearby addresses with larger homes and fewer late-night commercial uses nearby.

Apartments in this former hat factory are priced from £925,000 to £4.95m

However, one benefit of Soho’s mixed reputation is that prices are currently cheap by the standards of central London. “A small one-bedroom flat in a newly-built building was bought to market recently at £1,100 per square foot in what was described as a very ‘gritty’ location,” says Bradbury-Ross. By contrast, he says many apartments above shops in nearby Covent Garden sell at around £2,500 per sq ft. An additional drawback is the shortage of stock: sales website Rightmove says only 24 Soho properties have sold in the past year, and only a few are on sale now.

These include apartments from Jones Lang LaSalle and EA Shaw within a 19th-century former hat factory. They are priced from £925,000 to £4.95m. Close by in Soho Square, a 17th-century building – formerly the base of Bloomsbury Publishing – has been turned into five two- and three-bedroom flats on sale through EA Shaw for £1.85m to £4.25m. The largest Soho house on sale is a four-bedroom 2,665 sq ft property in St Anne’s Court, being marketed by Jackson-Stops & Staff for £3.6m.

It may be that Soho’s unusual character will not prove too disadvantageous, as its pool of buyers is unlike the rest of central London. They are “aged 40 to 59, design-conscious, possibly gay, and come from the legal, finance or health sectors, and we are also seeing an increased number from media, marketing, arts and entertainment,” says EA Shaw’s Guy Passey.

Soho, it seems, remains stubbornly different, no matter what changes are thrown at it.

Buying guide

● Residents driving in Soho pay London’s congestion charge of £1 per weekday

● Higher stamp-duty thresholds at £1m and £2m deter top-end buyers, say agents

● Operation Trafalgar is an ongoing police operation against Soho drug- and street-crimes

What you can buy for ...

£500,000: A one-bedroom apartment requiring updating

£1m: A two-bedroom apartment in a modern block

£5m: A six-storey house – but these are rarely on sale

Copyright The Financial Times Limited 2017. All rights reserved. You may share using our article tools. Please don't cut articles from FT.com and redistribute by email or post to the web.