Property: A million won't buy you much

A des res in one of the smarter parts of London does not come cheap. Catherine Pepinster on a rich man's game

The crocuses are out, spring is on its way, and the housebuyers are back. But what if you're seriously rich, and want a house with everything? Do you too have to head off on the estate agents' trail, making sense of hints of homes "with potential", or gardens with "imaginative landscaping"?

First, you have to face facts: if you want to live in the most expensive neighbourhoods in Britain, that is the most fashionable areas of London, you will not be able to find a house for even pounds 1m. The best properties in Belgravia, Chelsea and Kensington with six bedrooms, gardens, garages, parking space, and staff accommodation, now cost at least pounds 1.5m.

And if you are a serious buyer, you can't just pick up a few leaflets, or even flick through the pages of Country Life. Buying at the top of the market is a subtle, sophisticated process, requiring inside information about international buyers and sellers, and tip-offs as to what is available. And unlike the average housing market, it is not just sellers who pay commission to agents. The seriously rich pay agents commission in order to buy as well. On a pounds 3m house in the Boltons, one of Kensington's premier roads, that could mean spending pounds 50,000 just to find your dream home, let alone furnish it and hire the servants.

The market, although a competititve one, is nevertheless small. Around 20 houses worth pounds 3m each are for sale in London at the moment and there are usually no more than three a year coming up at more than pounds 10m. "The number of actual sales that take place over pounds 1m are a lot fewer than some agents would have you believe, " said Willie Gething, who runs Property Vision, an agency that concentrates solely on buying properties for clients. "It is a tiny market, and international money is essential to it."

While the market might be small, there is enough demand for prices to have been forced up in the last year. Prices rose by 17.6 per cent last year in the top end of the London market, according to the leading estate agency, Knight Frank. The reason? London is increasingly seen as the financial centre of Europe, and the richest American and European investment bankers are moving in, squeezing out the British. Knight Frank estimates that less than 40 per cent of buyers in the top price bracket are from these shores. These are the kind of people whom Andrew Lloyd Webber's agents, Savills, will be hoping to attract with the composer's home in Eaton Square. The square is one of the most desirable in London, and the house has six bedrooms, a swimming pool in the basement, a conservatory leading to two adjoining mews houses and a palm court. When Lord Lloyd Webber bought the house seven years ago, it was believed to have cost him pounds 11m. The word among the Mayfair agents is that he will want around pounds 15m for it.

What makes the Lloyd Webber sale so unusual is that the house has been put on the market amid a blaze of publicity. Those who buy and sell multimillion pound homes are usually far more reticent and expect their agents to be the epitome of discretion. A for sale sign or an advertisement would make them shake inside their Gucci loafers. Instead, quiet phone calls and inquiries among fellow agents are the way of doing business.

"If you're selling you often have no idea who your buyer is," says David Forbes, partner of Chesterfields estate agents. "They often ask us to use pseudonyms, or they buy their houses using offshore accounts. To them these houses are not just homes. They are part of a portfolio of assets and that is how they approach purchasing them."

Mr Forbes is one of the most renowned agents in London, and his job involves not just spotting the right property for the right client, but providing the kind of one-to-one attention for which the ordinary buyer, used to the slapdash service of the high street agent, pines. Not for these buyers the phone calls that never seem to get returned: if a buyer wants to speak to Mr Forbes they don't just get him instantly on the end of a phone, he flies to wherever they are in the world for an update on progress.

Wealthy international buyers may be keen to invest in the London property market, but they can be demanding and pernickety about the properties they want. Foreign tastes, influenced by life elsewhere in New York, Rome or Paris, often do not match what is on offer in the capital.

"What we think of quaint and charming may be seen as small and cramped by overseas buyers," said Willie Gething. "International people want air conditioning and showers, not stuffy rooms and tepid bath water."

Mr Gething cites Aubrey House, in Campden Hill, as an example of a property which appeals to the English, but has little attraction for the American purchaser. "The Old Rectory sold for pounds 7m so it has been assumed that Aubrey House could reach a similar price. But pounds 7m was achieved because of the house had been decorated in the most wonderful taste. Aubrey House has not been touched for years. Those from abroad often want something perfect."

"The typical central London with five to six floors does not suit always overseas buyers taste," said David Forbes. "People coming from Rome are often disappointed by the size of apartments and the ideal would be to buy adjoining flats and convert them latereally to make one giant home".

If size is a problem, the atmosphere of London is not. Buyers are often attracted here by the relative safety of the capital and the lack of fears of kidnap. Security measures are not unknown, though. Hugh House in Belgravia, developed by the wealthy reclusive German businesswoman Louise Charmant, who also sold Lloyd Webber his Eaton Square home, is on the market for pounds 25m and has been built with bullet proof windows.

Other roads with top price tags include Chester Square (around pounds 2.5m per house), home to the Thatchers, Chelsea Square (pounds 2.5m), the Boltons (pounds 6-8m) and Holland Park, where each of Richard Branson's adjoining houses are worth around pounds 7m. The most recent Holland Park sale was pounds 5m last year.

While the Americans and Europeans battle it out over these roads, the Arab petro-millioniares who so dominated the central London market 20 years ago have moved north and now prefer Hamptstead. As for the British buyer - the professional couple who have struck it rich in the City - and dream of their million-pound home they have been squeezed south of the river. A cool million no longer buys you a palace. Either the British buyer needs to find that bit extra, or you go down market and spend a little bit less for a sumptuous five bedrooms in Wandsworth.