Savvy investors will hedge their bets on some of London's eastern neighbourhoods, writes Angela Pertusini

Wage slave is a term that could have been coined to describe the average Londoner torn between self-loathing and mortgage payments. Tell us that we live at the pulsating centre of Europe's financial hub and, instead of blushing proudly, we will roll our eyes and wearily point out that just means we are up against several thousand pin-stripped, over-salaried City Charlies and wealthy overseas investors when it comes to moving up the property ladder.

And, in the past 18 months the role of Irish buyers has become more and more significant as the larger developers peddle their luxury apartments not just in London itself but in the Far East, Dubai and Dublin.

"My clients specifically woo Irish buyers now," says Alison Dean, a London property publicist. "It's a given that 15-20 per cent of any reasonably sized development will sell in Dublin now. No one's surprised."

At the moment, selling London property is not the difficulty - it is finding anything to market. The 4 per cent stamp duty on purchases of more than £500,000 (€761,048) is making many ordinary families think twice before relocating which has stifled flow to such a wretched degree of constipation that some agents mention - off the record - that they are going up to six weeks without receiving instructions for a single family house in good order.

"I've never known it this bad in 28 years," moans Ed Mead, director of the Douglas and Gordon chain that serves the wealthier pockets of south and west London.

Those who absolutely have to move report that gazumping has returned as well as the horror of "best and final offers", a form of extortion that flourishes in an atmosphere of paranoia where a buyer could well bid against no one but himself.

And all this is happening in January, often deemed to be the best month to sell as buyers filled with New Year resolve and families keen to get the move over before the start of the next academic year beat a path to the estate agents' doors.

Those traditional buyers are now competing - if that term applies to such an unequal sport - with the City bonanza boys whose bank accounts become seriously bloated as annual bonuses arrive from Christmas to mid-March.

Designed to promote worker loyalty and increase competitiveness (amounts paid depend on your company's performance, your department's performance and your individual performance), the bonus system has seriously tilted the playing field in London. More than 4,000 City workers expected to receive seven-figure windfalls this year and an anticipated £4.4 billion (€6.7bn) of bonuses will be invested in property.

So what is there to buy out there? As already mentioned, family houses have become an almost mythical product, such is their rarity. If you already own one, then you sit tight and extend in whichever direction you can: up, out and even down - hoardings emblazoned with basement conversion companies' logos is a common sight in the crescent of haute bourgeois enclaves that run clockwise from Clapham in south London to Islington in the north.

Many agents' books show that the basic churn is coming from other investors hoping to hit the top of the market. A lot of what is on offer is the sort of awkward conversion flat or pokey new-build that wouldn't sell in other circumstances.

The alternative then is new-build apartments and, for a long time, the overseas buyers have had the advantage in this investment. Not only are the grander schemes often marketed outside the UK first, but Londoners have traditionally been quite sniffy about their attractions. Inordinately fond of our original features, the whole new-build schtick seems a bit brash and arriviste for our conservative tastes while older Londoners feel that buying a flat should be a stepping stone to buying a house - living in one for more than a couple of years is tantamount to failure.

But the low maintenance many new-builds offer, together with the huge range of add-ons in the better developments - security, off-street parking, gym and so on - have made them a huge hit with investors and the younger people and international clients that tend to rent.

But, once again, there is a problem. There aren't enough large-scale new-build projects coming through. Government directives that demand social housing is provided on developments over a certain size has meant that many medium-sized developers now prefer to think small.

And there has also been a glut of planning issues that have delayed some major developments.

The bad news is that while deals were there to be done this time last year (Chancellor Gordon Brown had just reneged on his promise to allow residential property to be given pension investment tax breaks which put the brakes on a stampede to buy), this year, while there may be a little wiggle room on stamp duty and legal fees for bulk buyers and syndicates, large discounts aren't happening.

Developments in the traditionally favoured crescent of middle-class suburbs that clings to the western side of London's centre are selling off-plan while the ink is still wet on the planning consent.

If you want to be less traditional, then there are greater opportunities that come with proportional risk. To the east, there is Dalston, a shabby, down-at-heel satellite of Hackney but pleasingly close to still-trendy Hoxton and Shoreditch. Inevitably described as "edgy", Dalston plays off its seediness against proximity to the City and the soon-to-arrive extension to the East London line which will bring the tube to the area in 2010.

The second-hand property market is very, ahem, mixed in the area but modern, industrial conversions abound and £250,000 (€381,000) can go a long way. Currently, Currell Residential (020 7241 4111) has a selection of lofts carved out from an old hospital and Hamptons (020 7226 4688) is selling, off-plan, a large Victorian conversion with prices starting at £235,000 (€358,000) - below the 3 per cent stamp duty threshold.

At the other end of the extension is New Cross in south-east London, already blessed with two tube and two rail stations but, weirdly, under-developed.

Not only will the extended East London line make it more accessible, it has the advantage of an extremely over-subscribed secondary school, Haberdashers Aske's.

Do not underestimate the number of parents willing to rent a property close to a good school to up their child's chances of acceptance.

There is precious little maintenance-free new-build available but buying a less salubrious second-hand building for about £300,000 (€457,000) and renting to students at the local Goldsmiths College, part of the University of London, is an option.

Move further to the east, past the honeypots of Greenwich and Blackheath, and you reach Woolwich which has long been tipped for great things.

These things may finally arrive in 2009 when the Docklands Light Railway extension is opened, linking the unloved suburb with Canary Wharf and City Airport, currently tortuously close but not easily accessible.

Real gamblers could pick up a Victorian cottage for £150,000 (€228,000) and less but it might be wiser to stick to the landmark riverside developments such as Berkeley's Royal Arsenal, a vast redevelopment of a former military site of Georgian and Victorian buildings and large new-build blocks. Kinleigh Folkard & Hayward (020 7491 2055) have 30 flats from the latest phase available for between £200,000 (€305,000) and £410,000 (€625,000).

The great London property game is wheeling out your grandmother and getting her to reminisce about the time when Notting Hill was a slum and Battersea was a plague pit.

As high prices and lack of availability push buyers east, maybe I will one day be able to entertain the littl'uns with barely believable tales of Dalston's crime rates and Woolwich's dinginess and perhaps the Irish can play their part in creating such legends.