IRAQ: Baghdad's Green Zone Rents Now Match Mayfair

For rent: five-bedroom home on quiet side street, would suit foreign businessman or diplomat. Excellent home security, rent just $25,000 (£14,365) a calendar month.

They look like just another rundown Iraqi neighbourhood, but a row of houses in Baghdad's Green Zone are the ultimate proof of the maxim: "location, location, location". Safely within the American-controlled area's fortifications, the 10 modest villas can command rents to rival the best parts of Mayfair or Manhattan.

Since a private security company put them on the market three months ago, they have proved popular with Westerners anxious to avoid the car bombers and kidnappers who plague the rest of the city.

Other perks include views of Saddam Hussein's old palaces and a personal Iraqi shopper to avoid the need for death-defying grocery trips. "It might seem like a lot of money, but for foreigners visiting Baghdad now, the security costs of living outside the Green Zone are already so much that it makes sense," said Peter King of Edinburgh Risk, a private security company catering for businesses in Iraq.

"Not only do you benefit from the protection of the Green Zone, but you are spared all the problems getting in and out of the checkpoints, which can take hours each day. If you're doing business with a lot of government officials in the Green Zone, it's ideal."

The houses are among several thousand homes that have ended up within the Green Zone's perimeter, which has expanded to keep insurgents at bay. While Iraqi residents face rigorous checkpoint searches whenever they go in or out, few complain because it means their homes are spared the anarchy raging outside.

Growing numbers are putting their properties up for rent, aware that for Westerners, life outside the Green Zone is now so dangerous that not even the most heavily fortified hotels or homes are safe.

In the past three months, kidnaps and bomb attacks on hotels used by Westerners have escalated. The price hotels charge for setting up blast walls and hiring round-the-clock security guards can easily exceed the $25,000 a month Mr King is charging and without the level of protection.

Edinburgh Risks, which has an office within the Green Zone, has rented the entire street from the Iraqi families, many of whom have moved abroad.

"Many were a bit damaged so we pay the Iraqi families between $15,000 and $20,000 per month in basic rent and then fix them up and furnish them ourselves," Mr King said. "We employ about 80 local Iraqis who provide services such as cleaning, cooking and shopping."

Other benefits include satellite television and internet, and being within walking distance of the new Iraqi government buildings, the American embassy and other diplomatic missions.

Safety apart, however, life in the Green Zone is a time for work not play. Apart from a few fast food outlets, the only entertainment is a few bars and discos where the male to female ratio is about 100 to one.

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