Brighton's vibrant North Laine attracts locals and day-trippers by the thousands, but the area could now be becoming a victim of its own success.

Twenty years ago semi-derelict slums once stood where designer boutiques, bohemian shops and laid-back cafes combine to make today's North Laine a melting pot of the luxury and the niche markets.

It was the seedy underbelly of Brighton - an area visitors avoided, heading instead for the more salubrious Lanes.

Today the scene could not be more different. As with previously run-down areas of London, such as Covent Garden or Old Street, businesses moved to the area because of cheap rent, customers came flocking and, before long, commercial chains and housing developers caught on to the area's up-and-coming character.

What was once an unfashionable end of town is now so desirable for residents and business-owners, the traders who gave the area its quirky edge are on the verge of being pushed out because of soaring rents.

When doyenne of design, Terence Conran, shows an interest in an area it is safe to say the place has arrived.

A year ago architects Conran and Partners announced plans to develop the former offices of The Argus in North Road.

In an £18.5 million development of one, two and three-bedroom apartments, loft-living hit Brighton and buyers queued round the block to put down deposits on properties that wouldn't be completed for at least another year.

The former Gloucester salerooms have recently been converted into four two-bedroom live-work units, ideal for artists' studios, craftwork areas and offices.

Two-up, two-down terraces that two decades ago sold for £20,000 are now selling for £200,000.

Even the coffee shop chains have moved in. Costa Coffee and Coffee Republic are within doors of each other on Bond Street, pulling in customers who would otherwise have supped mugs of tea in nearby greasy-spoons.

Peter Stocker, who owns Workshop Pottery in Trafalgar Street, has seen the area evolve radically in his position as secretary of the North Laine Traders' Association.

He said: "I spoke to one man last week whose shop rent is going to increase by 120 per cent. His rent hasn't been reviewed for ten years and it came as a shock to him.

"Prices in the North Laine are quite high now. If they go up any more you will start seeing empty properties.

"We are still getting lots of shoppers coming through but there is a limit to how much one shop can generate to pay increased overheads."

According to Andrew Halfacree, director of Flude Commercial, the average shop in Bond Street is now rented out annually at an average of £55 per square foot.

When a shop came on the market it was snapped up and the interest from London businesses was high.

He said: "The North Laine area has changed a lot in the past ten years.

"It's always been bohemian and cosmopolitan and it still has those features but it's becoming more mainstream.

"There are a lot of retailers who have been there for a long time and their problems stem from the fact that they used to do okay when the rents were low but now they're selling what a lot of other retailers are selling."

Although Flude Commercial still lease a lot of shops to local traders, the nearer the property is to Bond Street the more expensive it tends to be.

The double-edged sword of success is acknowledged by Paul Zara, a Conran and Partners director in charge of the Argus Lofts project.

He said: "There is ample supply of retail space in Brighton and Hove for big name retailers and they will not come in to the North Laine as the units are too small.

"The Evening Argus building was an eyesore, full of rats and dead pigeons. This development provides flats for sale but also social housing, restaurants, shops, studios and workshops and the new headquarters for the Brighton Fringe.

"It's also a car-free development - there is no car parking on site and I think it's exactly the right thing for the area.

"We are confident that it will become a much-loved landmark."

Although not a part of the North Laine area, developments planned for nearby Jubilee Street, including a library, housing and hotel, will have an impact, drawing more people in and pushing prices up.

The multi-million pound development next to Brighton station, which will be decided on at a special meeting in December, will also bring in the buyers.

The New England Consortium has put in plans for development, including hotels, a language school, homes and a supermarket on the mostly derelict site off New England Street.

Eddie Start, owner of Open Spaces outdoor equipment shop in Trafalgar Street, is worried about the redevelopment but also acknowledges its importance in providing much-needed jobs for Brighton's unemployed and student population.

He said: "The station site employed lots of people from the city centre 40 years ago.

"A lot of benefits from that site were lost when the locomotion company was closed down. The next development will bring jobs and vibrancy to the city again.

"We are victims of our own success in the North Laine. The area is certainly proving to be very popular to businesses coming in, particularly from London.

"The effect can be that the increase of rent is disproportionate to the level of business sustainability. Success becomes one of those things that comes back to haunt you."

While the prospect of paying more for their leases is daunting for some, the regeneration of the area has offered opportunities for others.

Mr Stocker explained: "There are a lot of good things happening in the area. The shop spaces being developed in Trafalgar Street are twice the size of the average shop in the North Laine now, so local businesses wishing to expand can now do so.

"Previously, a business would have to move out of the North Laine altogether if it was to grow. There is a positive side to all of this."