If only we could all afford to live on Regent Street in Central London, then no one would have to worry about falling house prices.

The throngs of tourists might be a pain and the flashing Christmas lights in December might keep you awake, but Regent Street is one of the few urban areas in the UK that has not seen property values fall in the past year.

Instead, its value rose by 12 per cent to £1.8 billion, proving that in the property market it really is all about location, location, location.

The rising value of Regent Street last year helped the Crown Estate, the Government agency that owns much of Central London, to limit the damage done to the rest of its portfolio by the property slump.

The real star in the Crown Estate's portfolio last year, however, was not Regent Street but its farms and forests.

Owning farming estates has been rather unfashionable in recent years, but rapidly rising food prices have had a knock-on effect for agricultural land and the Crown Estate's rural assets rose in value by 26.5 per cent to more than £900 million last year.

The Estate also made a pile from sand and gravel dredged from the seabed as rival aggregate supplies further away became too expensive to transport.

This is one of the advantages of buying a monarch's property assets, as the Government did when George III swapped the Crown Estate for an annual pension (the Civil List) in 1760.

Years of seizing land from out-of-favour nobles produced a unique collection of properties and that now means that the Crown Estate is a naturally diversified investment portfolio capable of weathering the present property storm.

The deal has also turned out well for taxpayers. The Estate will return £211 million to a hard-pressed Exchequer this year, while the Civil List will pay the Royal Family about £40 million.

But George III's swap has turned out to be one of the worst property deals ever.

No wonder he went mad.

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