Selling new flats is now as important a source of revenue to Knight Frank as luxury house sales.Jonathan Seal at Hamptons says: "The development business has increased substantially - the amount of new property we handle is up 40 per cent on last year - but that is the result of three years' work."Hamptons wins development business by offering to invest in the scheme as a joint venture partner and to share in the developers' eventual profit This is paying dividends thanks to the market's strength. Agents say death and divorce are now the main reasons for houses coming on to the market.The shortage of luxury houses is forcing the agents to look at other sources of revenue. The booming market for new developments across London has attracted the attention of the large firms. Because there is little property to buy, owners are reluctant to put homes on the market. Rising prices are also encouraging homeowners to hang on to their property in expectation of a better sale later. This lacklustre performance meant the residential directors received lower bonuses than in 1998. "It is extremely competitive between agents vying for instructions," says Christopher Cornell, head of Knight Frank's residential division.

Jonathan Seal, development director at Hamptons International, also admits: "We're not into cutting fees generally, though all the agents become very competitive when it comes to an important London property." Profits at some agents have remained almost static.Publicly listed up-market agent FPD Savills stunned the City when it reported profits up 36 per cent on last year, but profits for its residential agency business barely improved. In the stockbroker belt of Surrey, prices have soared by over 30 per cent and a shortage of de-luxe homes for sale has forced agents to offer incentives to would-be vendors.Other areas of the country have seen much more modest property price rises, but agents complain that the shortage of good properties to sell is widespread and is a serious brake on their ability to profit from the housing market's upturn. In leaner times they could expect to get between 2 and 3 per cent. The cut-throat competition is not confined to central London. But intense competition between agents to sell a small amount of prime property has slashed commission fees and hit profits. Harassed home buyers will be less than sympathetic to the agents' plight, but competition for business is now so hot that as many as 20 firms of agents will bid to be appointed on prime new developments, squeezing commissions to as little as 0.5 per cent per home sold. A year earlier the basic rate of interest was 7.5 per cent - 50 per cent higher than it is today It is little wonder that profits are up How long will they be able to get away with it?.

London property prices are soaring to new heights, but up-market London estate agents cannot cash in on the boom. Homes in Chelsea are 25 per cent higher than this time last year, and most other prime areas of central London have risen by 20 per cent or more in less than 12 months. In the first six months of this year, Barclaycard made profits of pounds 196m, up 17 per cent from the same period last year.The interim report mentioned that net interest margins remained at similar levels to the year before. For reasons of prudence, no doubt, banks prefer not to strip out the profits from card services from other retail business, though Barclays comes clean. These proved once again that banking is an unusually profitable business.

Or even a gold one for that matter.Top rateMY NEW credit card is accompanied by the information that the annual rate of interest on purchases is 19.7 per cent, or 1.51 per cent a month.That helps explain the swollen profits of Britain retail banks in their interim statements issued recently. Since pounds 1 in 1979 is worth pounds 2.92 today, that pounds 3.54 is now worth pounds 10.34.What this means in real terms is that silver presently stands at one- third of the value it had before Bunker attempted his corner.The lesson is: never listen to a silver bug. Bunker and his allies - including Prince Abdullah, now the heir apparent to the Saudi throne - were talking silver up to $85 an ounce.To force home the lesson that what goes up, comes down, here is what has happened to silver Yesterday's price was $5.37, or pounds 3.34 The early August price of $8 was worth pounds 3.54 in 1979. Speculators had tried to corner grain, or soya beans, even pepper and bismuth, but never silver.The silver price at the start of August 1979 was $8 an ounce Within a month it had doubled In the next five months, it rose to a peak of $52.50. The information may well find its way into the liquidator's negligence case against Coopers and Lybrand.Silver anniversaryTWENTY YEARS ago this month, two legendary Texan oilmen named Bunker and Nelson Hunt got together with some Saudis and started a covert silver- buying spree in Dallas, Texas.It was the beginning of an attempt to corner the market. Mind you, the finest corporate memory in the City failed to save Warburgs.Incidentally, here's some incidental intelligence: Nick Leeson has spent two days recently with the Barings liquidators, Ernst and Young, giving a step-by-step description of the way he worked his notorious "eights" account which hid his fraudulent dealing from Barings. When I express surprise at this he replied: "But I'm the oldest director at Barings Bank."With such a contempt for experience, no wonder it collapsed.