The kitchen and hallway of the Temperance Works, a warehouse conversion on sale for £4.5m

London is a city where rich and poor live side by side and nowhere is this more obvious than in Kennington, where residents of fine Georgian townhouses and new-build apartments enjoy views of particularly miserable examples of postwar social housing.

Yet the Kennington “triangle”, the tangle of streets between Lambeth North, Vauxhall and Kennington underground stations, has been identified as that rarest of beasts – a largely untapped area of property growth potential within central London. Estate agent Kinleigh Folkard & Hayward (KFH) describes it as the most exciting micro-market in London, thanks to its combination of good transport links, proximity to central London and value for money. “I think it must be one of the only [ . . .] areas in zone two where there is this kind of potential,” says John East, director of land and new homes at KFH. “The area is just starting to snowball.”

In terms of connectivity, the triangle ticks all the boxes. As well as three Tube stations, it is less than a mile from the Southbank and Westminster Abbey. Its proximity to parliament means it is a popular location for MPs – former Labour cabinet ministers Hazel Blears and Alistair Darling, and the former Liberal Democrat leader Charles Kennedy have all owned property in the area.

The triangle sits between Nine Elms and Elephant and Castle, areas which are attracting billions of pounds worth of regeneration investment. East anticipates that as these areas grow in status so will Kennington.

Indeed, house prices are already on the rise. Average values in the wider borough of Lambeth are soaring – up 13.5 per cent to £426,472 in the 12 months to November 2013, according to the Land Registry. Within the triangle itself, KFH says the price of flats has risen 14.4 per cent in the past year, while houses are up 8.9 per cent.

Despite this, local prices still compare favourably with neighbouring areas. According to KFH, the average overall property price in the triangle stands at £368,863, compared with £542,385 on the Southbank, and £786,874 in Westminster.

This difference has not escaped the notice of developers. There are currently 585 private homes either under construction or in the pipeline in the SE11 postcode. These include Lilian Baylis Old School, a £60m reboot of a secondary school site which had lain empty for almost a decade. Developer Henley Homes is building 149 new properties, 89 for private sale.

Prices range from £399,950 for a one-bedroom flat, up to £1.075m for a four-bedroom townhouse. The scheme is designed by Conran and Partners and the most exciting option may be the apartments within the Grade II-listed modernist building, which feature bare brickwork and striking floor-to-ceiling windows.

Having already sold a smaller scheme in the triangle, Phil Kapur, senior land manager at Henley Homes, is confident that buyers will not be deterred by the fact the site is overlooked by the Ethelred Estate, an area with an unfortunate reputation for gang violence.

Other developers will be watching the former school’s performance closely, in particular Investin Plc, which is building 45 apartments in Black Prince Road; and St James, which is working on two Thames-side projects – 20-21 Albert Embankment, a 253-apartment block where prices are expected to start at about £580,000, and the Merano Residences, featuring 34 top-end serviced apartments.

Even artist Damien Hirst is getting in on the act, building what he has described as his answer to the Saatchi Gallery at a site in Newport Street to house his private art collection.

As well as all the new homes, Kennington has some fine Georgian architecture. Johnny Male, a director at Daniel Cobb estate agents, says the three- and four-bedroom townhouses in Cleaver Square are among the best examples, priced at about £1.4m.

Most of Male’s buyers, however, are City workers who want a central address and have a budget of about £500,000. For this, they could buy a two-bedroom flat in Imperial Court, the former headquarters of The Navy, Army and Air Forces Institutes.

©Alamy

Kennington Park

More recent conversions include the former Sea Cadet’s Hall in Courtenay Street, now a three-bedroom house on sale with Daniel Cobb for £825,000, and the Temperance Works, a three-bedroom, 5,000 sq ft warehouse conversion in Ravensdon Street, priced at £4.5m with Hamptons International.

Unlike other parts of central London, Kennington’s fortunes are not hitched to overseas buyers. “They really don’t understand south of the river at all,” says Male. “That may change with the Nine Elms development, but at the moment the buyers are from the UK.”

Despite its many positives, independent cafés, good restaurants and interesting shops are still relatively scarce. On the other hand, cricket fans have the Kia Oval, home of Surrey County Cricket, on their doorstep.

East hopes that the individual projects will eventually bring about change in the area. “It is like there are all these little pieces of a jigsaw puzzle that will eventually start knitting together,” he says.

-------------------------------------------

Buying guide

● The average value of flats in Kennington has risen 84 per cent over the past decade, while house prices have increased 93 per cent during the same period

● There are five Tube stations within walking distance. A new station at Nine Elms is planned for 2020

● Professionals and managers make up 38 per cent of working residents

● The crime rate in Lambeth is 108.48 recorded offences per 1,000 people, compared with an average rate in London of 87.58

What you can buy for . . . 

£500,000: A two-bedroom flat in the former NAAFI headquarters

£1m: A new, four-bedroom townhouse at Lilian Baylis Old School

£1.5m: A four-bedroom Georgian terraced house