Mohammad Wali is a happy man, his property business is flourishing and he credits the British with his success. “I am the only man in Helmand happy with the British, my business is booming,” he told The Times.

Daily pitched battles and air-strikes between British troops and Taleban rebels have prompted thousands of families to flee the outlying towns of Sangin, Kajaki, Musa Qala, Nauzad and Garmsir. The influx into the provincial capital of Lashkar Gah has sent property prices skyrocketing.

Mr Wali, 47, a former general in the Afghan military, entered the property business three years ago. During the past year, as British troops arrived and spread out into district towns, his business has increased threefold, driving the price of simple mud huts to US$100,000 (£50,000) and the fancier homes, of the kind favoured by opium dealers, to $400,000.

A modest home near the city centre and close to the main road can go for anything between $50,000 and $100,000, explained Habibullah, 36, another property dealer. For that the buyer would get a house made of mud that, although cool in the hot summer months, leaks when it rains and needs replacing every year or two.

The house would generally be single-storey and have an outside kitchen and a simple bathroom. Electricity would be sporadic, the sanitation nonexistent and the plumbing rudimentary. There may be up to 800sq m (8,600sq ft) of land, although it would generally be dusty with no vegetation or trees.

For a concrete house a buyer is looking at paying more than $150,000. The most important “extra”, which would push the price beyond $200,000, is a deep well, providing a clean water supply. Sanitation is poor in the city and clean water is not available publicly.

Such houses, with Western-style bathroom, a big, neat garden and guesthouse, were often built in the 1950s when the Americans had a large presence. They usually have white walls and are set in a compound.

For the most expensive houses in Lashkar Gah, which have been known to reach $400,000, the buyers will be paying for “style”, or a lack of it. The compound walls are higher and the houses typically resemble a cross between the home of an Eighties’ mobster and a Barbie doll house.

Standard features include a manicured garden, a water fountain, mirrored windows, gold- trimmed bathrooms, pink or lime-green paint and possibly mirrored tiles.

Rents have also shot up. A year ago a mud hut in town would go for $60 a month; now landlords charge $200, with the most expensive houses approaching $6,000 a month. A policeman or doctor is paid $50 a month.

Property prices in southern Afghanistan have been rising steadily since the September 11 attacks brought an influx of foreigners. A property selling for $300,000 today would have gone for about $50,000 five years ago, and as little as $20,000 under the Taleban.

Lashkar Gah now has some of the most expensive houses in Afghanistan, equal to those in the capital, Kabul.

Security in the southern city, relative to the rest of the province, is one factor that has driven the prices higher. So is the vast amount of drug money that is swilling around the province. Helmand produced 40 per cent of the opium in Afghanistan last year, an industry that is worth about $3 billion annually and which provides 90 per cent of the heroin that is available on the streets of Britain.

Opium production rose last year by 59 per cent, despite the efforts of the British-led counter-narcotics agencies.

Drug barons and smugglers who make millions from their trade have very little on which to spend their money in Afghanistan and find it difficult to take their profits out of the country. Property is one of the few commodities that they can buy. “After the harvest, when people have money, the prices hit the sky,” said Mr Wali.

“Helmand is a dodgy province and people want to come to the city as it has clinics and schools and the security is better than anywhere else in the region.”

Although Lashkar Gah is the scene of suicide attacks and the Taleban congregates only a few miles from the city centre, by Helmand standards the city is safe and the shops are full of produce. Houses are therefore in great demand.

“Every month we are renting or selling 20 or 30 houses, it’s very good business at the moment,” Habibullah said.

Haji Zulmai, 32, another property dealer, said: “For our business, the destabilisation is good. Security was better under the Americans but the British are making my business much better.”

The consequences for those without enough money to meet the inflated rents are dire. “I was meant to rent a house but I just can’t afford it,” Ahmed Wali, 45, a father of nine, told The Times. He fled Nauzad, only to be faced with a choice between renting a house or feeding his children. “This is why I live in a tent,” he said.

Times Recommends

• Mandela’s tribe threatens President Zuma
• The French empire strikes back
• Wife of cheating governor exacts a political revenge