Long ago, roughly 2,000 years before the film star George Clooney famously bought a pair of villas on Lake Como, Roman patricians and high ranking officials took refuge from congested urban life on these steep, wooded shores. Virgil knew of the lake. Como native and 2nd-century Roman statesman Pliny the Younger built two country villas here: one in Lenno and one in Bellagio, which he called "Comedy" and "Tragedy", according to a guide book. Over the centuries, European rulers, industrialists and cultural luminaries have followed, enjoying homes among fishing villages and silk-makers.

Lake Como is the lucky, long side of a wishbone-shaped lake, the shorter, eastern leg of which is Lake Lecco. Located about an hour by car from Milan, the lake, or at least its southern half, also has unusually beautiful natural assets. Its narrow breadth and the surrounding hills imbue it with a dramatic intimacy not found in its beautiful sister lakes, which sashay in irregular file from east to west along the borderlands of northern Italy and southern Switzerland. The Romantic poet Shelley said: "This lake exceeds anything I ever beheld in beauty," while Wordsworth called it "a treasure which the earth keeps to itself."

As a result, a succession of elite European landowners has left it with a legacy of stately villas and manicured gardens, taming its landscapes with grand and elegant domesticity. But there are also colonies of humbler homes and busy towns around the water.

To this day the residential real estate market in Como is cleft in two: there are the exclusive properties, usually whole or subdivided historic villas, and then there are the more modest homes, which offer surprisingly democratic access to the shell-coloured towns that trim the shore.

Anna Scibé, owner of Target Immobiliare in Argegno, says a 70 sq metre apartment with a lake view can be bought for as little as €150,000, or between €2,000-€2,500 per sq metre. The top of the market, by contrast, runs at about €5,000-€6,000 per sq metre for luxury villa apartments and high-quality independent houses of more recent construction. As for large private estates that have remained intact, local realtors say it is very difficult to gauge prices because such properties change hands only rarely and on very private terms.

Most of the high-end homes are concentrated round the southern half of Lake Como, especially on the sunnier and more accessible western shore, between Cernobbio and Menaggio, but also on the eastern shore in the area of Bellagio. It is also the southern half of the lake, with the exception of the somewhat blighted city of Como itself, that draws aristocrats and VIPs. Italian professional soccer players and pop singers hang out here, as do the country's nobles, bankers and industrialists. Richard Branson bought a villa in Lenno a few years back, while George Clooney summers in Laglio. The Versace family is rumoured to have recently sold its villa in Moltrasio to a Russian. And newspapers reported earlier this year that Italian prime minister Silvio Berlusconi bought Villa Bellinzaghi in Cernobbio for €12m.

The further one moves towards Milan and its airports, the more expensive the properties are. The real estate chain Tecnocasa says that a 200 sq metre apartment between Cernobbio and Laglio can go for as much as €5m but averages at €5,000-€10,000 per sq metre, compared with €4,000 per sq metre around Lenno and Menaggio. Cernobbio, it should be noted, is home to the five-star resort Villa D'Este, a lakeside estate with a long line of venerable occupants including the Russian Empress Maria Fedorovna, which still hosts contemporary heads of state. But Lenno and Tremezzo also have their attractions, including palatial historic architecture, much of which has been subdivided into apartments, and a microclimate that Scibé says is roughly 3°C warmer than the rest of the lake. They were once preferred vacation spots for upper- class Italian families.

The eastern shore north of Como is more heavily wooded and less accessible. Its primary road twists and turns in the craggy stone high above the lake shore, which means a number of towns and properties require a steep hike to reach them. Still, house prices are similar to those on the western stretch of the lake.

This sub-market tends to attract a different crowd of Germans and northern Europeans drawn to the wild, natural surroundings and the idea of "roughing it" - albeit in Lake Como style. "The southern half of [the lake] attracts a kind of slow movement tourism - people who enjoy leisure-boating, the aperitif, soaking in scenery," Scibé says. "The northern half of the lake is more active, sports-oriented."

The exception is Bellagio, at the tip of the point between Lake Como and Lake Lecco. Famous for its beauty and its grand villas, it has access from several directions, including a ferry from Cadenabbia, and is flooded with tourists as a result. Property prices are near to the €5,000-€6,000 per sq metre mark.

Scibé instead recommends other, more peaceful, less expensive eastern towns, such as the old fishing village of Varenna to the north. "Varenna is a jewel," she says.

Even further north, the landscape opens out, gets a bit windier and attracts a different balance of local activity and tourism. Towns on the north-east shore have some unattractive development and industry, particularly boat- building, while the north-western shore hosts a number of camp sites, as well as being popular for water sports, including windsurfing, sailing and water skiing. House prices here are about half what they are in the south.

Rachel Birthistle and her family scouted both northern and southern shores for their lake home three and a half years ago. Born and raised in Ireland, she is a personal trainer and teaches pilates in Derby, England, where she lives with her husband, a businessman, and their two nearly grown children. They settled on a place in the hills just above the south-western shore town of Argegno.

Unbuilt terrain on Lake Como is scarce but by going into the hills Birthistle and her husband were able to buy a project for a single home while it was still on drafting paper and therefore customise its floor plan. Now a cheerful yellow house perched up 2km of steep, winding road from the shore, it has three bedrooms, three bathrooms, a television den, an ample kitchen and living area, a garage, a terrace, a swimming pool and broad lake views. Birthistle was reluctant to say how much it originally cost but it now has a market value of about €700,000.

Scibé estimates that the Lake Como market as a whole has risen about 7-8 per cent per year over the past few years and claims the area will never be hit by the housing slump because of the scarcity of land.

Birthistle, for one, isn't worried about her investment. Although she and her husband currently visit the house about once every three weeks, they are seriously considering a permanent move next year. The family keeps a boat on the lake and takes advantage of local golf, tennis and water sports facilities. "We've made lots of friends in the area. People are warm and you can feel their family values," Birthistle says. "That home is probably the best thing we ever bought. I like it too much."