Three decades ago the Pompidou art centre, designed by Richard Rogers and Renzo Piano, was the focus for regeneration around Les Halles in Paris. Nearly a decade ago Frank Gehry’s shimmering, titanium-clad Guggenheim gallery put some oomph into a dilapidated part of Bilbao. And in New York, Larry Gagosian’s Chelsea gallery is credited with boosting the once dodgy Manhattan meatpacking district.

Gagosian, nicknamed Go-Go in the art world for his maverick energy, started out by buying $2 (£1.14) posters, sticking them in aluminium frames and selling them for $15. Now he runs five of the biggest commercial galleries anywhere, with celebrity-packed opening nights. Artists were already chasing big loft studios around Chelsea. But when Gagosian put his mark on the area — matching A-list clients with A-list artists — financiers and wealthy socialites started battering their way in. Property prices near the gallery at West 24th Street are about $2,500 a square foot compared with $1,300 further along the Hudson river. Now London will start to see the Gagosian effect, with apartments about to come on the market above his new gallery in Britannia Street, King’s Cross. It was designed by Caruso St John, the architects who were also behind the hugely successful New Art Gallery that opened in 2000 in Walsall.

Buyers are already scrambling for the nine flats above the Go-Go gallery, although they are still under construction. The development, by the London Regional Property Fund, is designed by the award-winning architects Tasou Associates, with their signature sliding-glass partitions, curved walls and zinc balconies. There are four one-bed units, one two -bed unit and four three-bed units. Prices are from £295,000 to £625,000.

Andrew Jones, at Knight Frank, which is marketing the flats, says that the exclusivity of being above the Gagosian could push prices up to 20 per cent above the local market. But with such a fantastic Central London location — close to the City and the West End, and with Paris only two hours away once the nearby Channel Tunnel rail terminal is completed — they sound like good value. “There will undoubtedly be a gallery effect,” says Jones, “and we are bound to see prices go up.” He predicts that they will rise by 25 to 30 per cent across the King’s Cross area.

King’s Cross, fast turning from red-light district into a property hot spot, was given a huge boost this month when Argent obtained planning consent for a £2 billion development. Almost 70 acres of derelict railway land will be transformed to provide offices, homes, shops, restaurants, a park and a concert hall. The gallery effect can be seen around the country in areas near the Tate Modern in London, Tate Liverpool, Walsall Gallery and the Baltic Centre for Contemporary Art in Gateshead. Their impact can be dramatic. Two-bed flats on the doorsteps of these galleries are sometimes going for treble what you would pay for a house in nearby streets.

Charles Thomson, who ran the Stuckism International Gallery in Hoxton, East London, says: “When a significant gallery moves into an area it starts a knock-on effect. It attracts artists and visitors. Property companies develop previously unwanted buildings. Before too long the place is transformed with clubs, bars, shops, more galleries and related businesses and a new population. Prices can soar. Hoxton is a classic example . In a recent three-year period, rents doubled each year. It is now a boom area which has not yet reached its peak. Artists who set the place going have to move on to discover somewhere else.”

Jemima Pyne, communications and publishing manager for Tate Liverpool, says the gallery has definitely been one of the catalysts for reviving abandoned stretches of the Mersey waterfront. Pyne has been with the gallery since it opened at Albert Dock 18 years ago. “We’ve seen a huge growth in numbers coming back to live in the city,” she says. “The gallery has been important for what has happened in the old docks. We were bringing people into the area. Now we are the most visited gallery outside London with 600,000 visitors a year, so we are a magnet.

“In 1988 we were surrounded by empty docks and rundown industrial buildings. Now they are bristling with new flats and houses. Bars and restaurants have sprung up to give it life at night. You notice the difference especially on a Sunday, with people walking about.”

The growth has had an impact on prices. When Pyne moved to Liverpool for the job she bought a two-bed, new-build flat near the Tate in an area where there used to be rundown back-to-backs and tenements. “Friends thought I was mad when I paid £16,000 here, but goodness knows what it’s worth now.”

Was she surprised that a flat next to her gallery was going for almost £500,000? “No. It is a lot, but the area is booming.”

Darren Waller, director of Livingspaces, the Newcastle upon Tyne estate agency, says that the Baltic Centre in Gateshead, which opened three years ago, has had an impact on revitalising the Quays area on the banks of the River Tyne. “It was several things coming together. We had the Millennium Bridge, we had the gallery, and we were competing to be the next European Capital of Culture. The area was getting known and talked about, which helps to bring people in.

“We are selling to actresses, footballers and we have just sold an apartment to a director of opera companies in the US. It’s a lifestyle thing. We get the dinkies (double income, no kids) and the empty-nesters who want to be on the river. It’s a great location. It’s beautiful. It’s got the views and security. And its so close to the city centre that you can walk there.”

Details: Knight Frank, 020-7598 4000, www.knightfrank.co.uk. Tate Liverpool, 0151-702 7440.

Livingspaces, 0191-222 1000, www.livingspaces.co.uk.

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