SELLING your home is an emotional business, and green-eyed Envy is bound to raise her head if your buyer then makes a tidy profit on it. Just ask David Khalili — a difficult task as the art dealer is notoriously reclusive, but if you bump into him, by the deli counter in Asda, say, do ask about his house in Kensington Palace Gardens, which he flogged to the motor-racing supremo Bernie Ecclestone for £50 million and which has been sold on for a lot more than the £70 million being bandied about.

That’s an impressive mark-up, and Ecclestone didn’t even need to do the usual seller’s tricks of giving it a fresh lick of paint and a new kitchen. In fact, he didn’t even live there during his 2½ years of ownership. The half-pint-sized Ecclestone did Khalili a favour by taking such a white elephant off his hands, but Khalili must be miffed at setting the asking price so low.

It’s a pretty astonishing house. No 18-19 Kensington Palace Gardens is made up of the former Egyptian Embassy and part of the old Soviet Embassy. It features honey-coloured stone, towers and battlements, an underground car park for 20 cars and enough bedrooms for a football team. Perhaps that is why the Chelsea owner, Roman Abramovich, was reportedly interested in it. But even he was outbid by the Indian steel magnate Lakshmi Mittal, who has been on something of a buying spree this year.

The house has been dubbed the Taj Mittal, as much of it is fitted with marble from the quarry in Agra that provided material for the Taj Mahal. It has a swimming pool with gem- encrusted pillars and a Persian carpet design on the bottom, but for the man of steel it is little more than a pied-à-terre, since he already has an 11-bedroom house in Hampstead.

A recent survey by Knight Frank revealed that Kensington Palace Gardens is the cream of London addresses, beating such juicy strawberries as the Bishop’s Avenue, Eaton Square and Cadogan Square. With barely 20 private dwellings, it is surprising how one always seems to be available, as embassies move out and tycoons or royalty move in. Next week some of them, but possibly not the most exalted and private, such as King Fahd of Saudi Arabia or the Sultan of Brunei, will be the guest of Prince Michael of Kent (the famed impersonator of Tsar Nicholas II) and his wife at Kensington Palace for a party to mark the 150th anniversary of the completion of this famous road.

The royal link with this West London area began in the late 17th century when the asthmatic William III bought Nottingham House with its “very delicious” gardens to escape the London pollution. It turned out to be a brilliant wheeze and Kensington Palace swiftly developed. When Victoria came to the throne, it was decided to move the royal kitchen gardens away from Kensington and create a private avenue of 33 plots on the site, running from High Street Kensington to Notting Hill Gate.

The first great entrepreneur to build on the site was John Marriott Blashfield — a name crying out to be played by Bill Nighy in a BBC drama — who bid for 20 of the plots and built houses of such astonishing opulence that hardly anyone could afford them. The first residents in what was originally called Queen’s Road were landowners or industrialists such as the railway entrepreneur Sir Samuel Morton Peto. His house was large enough to accommodate 28 people — including 16 servants — but it wasn’t big enough for Sir Sam, so he built an even larger one next door.

The road was also home to London literati. The Punch artist John Leech was one of the early owners at No 18, later home to Baron de Reuter, the news telegraph pioneer who had perhaps the finest pair of sideburns ever seen in the street.

At No 2 lived the novelist William Makepeace Thackeray who built “the reddest house in town” and set the fashion for brick construction. The street became an engaging mish-mash of different styles, from Moorish mansions to Italianate villas. It was where beautiful Edwardians cavorted. In the garden of No 12, owned by the Earl of Rocksavage, were two tennis courts, where the great prewar French players, such as René Lacoste and Suzanne Lenglen, would get in a few sets before Wimbledon.

After the war, the street was taken over by important ambassadorial residences, such as those of Israel and the Soviet Union. This led to formidable security provisions, which exist to this day. Both ends of the street are guarded by security lodges and there are more CCTV cameras than in the Big Brother house.

Over time the street lost some of its sheen, as hard-up embassies had to choose between keeping the properties in good nick and giving up some of their Ferrero Rocher ration. The chocolates tended to win and the area began to look a bit tatty. Gradually, however, KPG, as locals call it, has become more residential and the arrival of the ultra-rich, beginning with the Sultan of Brunei, who bought a house for £18 million in 1991, heralded a renewal of the street.

Before Mittal’s mansion, the biggest sell was No 15, which was bought in March for just over £40 million. The house was once the residence of the Iraqi Ambassador and was at the centre of a diplomatic dispute in the late 1940s.

Faisal, the boy king of Iraq, was playing with a ball in the garden and, as lads do, managed to knock it into the garden next door. Unfortunately it was thrown back in the wrong direction — into the garden of the Soviet Embassy. Iraq’s attempts to get the ball back required the same sort of diplomacy and bargaining that is currently needed in the Middle East, or even to organise the exclusive invitation list for next week’s royal garden party.

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