London’s alphahoods tell us a great deal about the desires and preferences of the rich. They also offer an insight into how the machine of capital is harnessed to the city’s property market. While London’s fortunes are closely tied to its finance economy, the latter also brings a distinctive market in real estate that enables the rich and their wealth to be accommodated. To understand this machine of wealth creation, investment and storage we need a sense of where the money goes and why it goes there. The new rich have often purposely moved into areas already long established by the city’s elite. But their impact can be felt across the whole metropolis.
In 2017 London saw the largest number of homes sold for more than £5m (1,400 of them). A decade earlier in 2007, just before the financial crisis kicked in, the most expensive home sold in London was £19m. In 2016 three homes were sold in the city for more than £90m each. In 2018 the record was broken again as Nick Candy sold a flat to himself for £160m in the development he built, One Hyde Park, via an offshore company. In 2019 Ken Griffin bought a pair of London homes for £95m (one a home in St James’s bought for £65m and then renovated). To cap all of this off, 2020 began with the sale of the single most expensive home ever sold – £200m for a home in Knightsbridge, with 45 rooms, by a Chinese tycoon. Such transactions can be seen either as a sign of confidence or as a kind of madness in the city’s prime property market, known in economics as the theory of the greater fool – recklessly throwing money at trophy homes in the hope that a bigger fool will come along one day to buy it at an even higher price. In most cases purchases are made because these homes are like trophies that signal either winning the game or social standing.
Alpha homes sales index a deeper, seismic shift in the mass of wealth commanded by those at the top of the global hierarchy. Here financial capital has been translated into something tangible, something that can be witnessed in the daily life and look of the city as the global wealth elite have re-made many of the quarters and districts that had long housed its traditional elites, including Belgravia, Mayfair and Knightsbridge. For some time such neighbourhoods had become mixed areas devoted to luxury shopping, offices and embassies occupying substantial homes that even the rich were unable or unwilling to service. Now these areas have seen a resurgence of residential fortunes remarkable in their scale; in cases like Grosvenor Crescent, almost entire streets have been bought and redeveloped for international buyers. Such changes also began to indicate how staggeringly wealthy private individuals were able to out-bid competitors, and perhaps more importantly, the city’s existing rich residents.
Between 2016 and 2018 alone a thousand homes were sold for somewhere between £5m and £15m. Over the past decade the sale of homes worth more than £1m can be counted at around 75,000 transactions – coincidentally this rather neatly equals 1 per cent of the total number of sales over this period in London. It is estimated that the UK treasury raised around £24bn over the decade on these sales. It seems naïve to think that political and economic interests are not vested in a property system that yields so much to both private agents and public coffers. The increasing internationalisation of London’s wealthy buyers has created the impression of an almost limitless cloud of cash descending on the city. Because of this it has the feel of a fantasy property market, disconnected from the reality of life for the city’s mere mortals and indeed beyond the budget of even many of the city’s existing wealthy.
The extremity of alpha market prices and the opulence of many of the new developments geared to the rich have a somewhat ominous feel, perhaps because it may presage an approaching real estate crash, the proverbial canary in the mine, though such fears appear to have been allayed with the resurgence of Conservative national government. But another and more relevant concern is the danger of this transformation having a potentially destabilising effect, by inflating house prices as they cascade down into the wider property market. A more serious problem still, however, is the almost system-wide reallocation of housing development activity as it seeks out wealthy international buyers, rather than those on moderate incomes or those in need. When looked at soberly we can see the market in homes for the rich as a sign of urban malaise rather than a mark of global city pre-eminence.
The sale of homes generates a significant cast list of beneficiaries that includes governments (through taxes on house sales), private developers (through profits on sales) and estate agents (by mediating those sales). All of these groups benefit from the expansive circuits of consumption at the top of the city’s property market. The trade in homes also brings new residents to the city – the more expensive the property, the more international the market. Sales also generate spin-off economic effects through flows of monies to developers, real estate agents, interior decorators and builders. In this sense it is not surprising that estate agents, developers and financiers are among the most vocal exponents of the city as a place that can and should attract footloose international capital.
Superhomes in alphahoods
For the international rich, one of the great attractions of London is its offering of classical Georgian and Edwardian terraces, squares and palatial homes. The dramatic growth in the number of the wealthy means that the traditional territories of the rich have expanded to include the city’s inner and outer suburbs, a landscape increasingly filled with electronically secured cottages, mega mansions and multiplying enclaves with gates.
Many of the most important locations are familiar to the wealthy around the world. Chester Square (where nothing costs less than £10m), Eaton Square, Cheyne Walk, Grosvenor Square, Park Lane, Berkeley Square, The Bishops Avenue and Kensington Palace Gardens are key points on the prime London property map, but essentially they need to be understood as global addresses. These are the standout peaks in the mental maps of the global wealth elite as they compete to occupy the most advantageous locations. But these micro-worlds of the rich are not a single or uniform type of place. In reality they are formed of archipelagos of protected neighbourhood spaces and luxurious homes and are identifiable for the subtle differences displayed by the different tribes that comprise the super-rich. The preferences of these groups are defined by a number of key factors, including nationality, family structure, age and the particular path they have trodden to wealth.
The extent of wealth, the type of household, the presence or absence of children, and connections to existing social elites all play a role in steering the rich to particular quarters of the city. These factors in particular shape diverse rather than uniform tastes, including varying preferences in architecture, house type and urban or more rural locations. While rich Russians gravitate to the centre, they also have historical links to the inner north at Highgate and Hampstead where the Russian embassy used to be located. Arabs have enjoyed Chelsea and Mayfair for more than forty years, ever since their oil wealth generated incredible riches that opened the doors of central London casinos and clubs to them. Wealthy Americans tend to go for the inner West of the city or, if driven by schooling needs, to the outer suburbs and beyond. Wealthy Hong Kongers, Chinese and Singaporeans, as well as some from the Middle East, enjoy the lateral living and security of apartments found in the West End and waterfront areas. These are generalisations, of course, but they show the need for us to see the rich as a diverse group whose tastes and interests take them to particular alphahoods in the city.
Many of London’s alphahoods and the stunning homes within them are desired for the status they appear to bestow on the buyer. Often their rarity makes pricing difficult, which can lead to substantial variations in final sale prices as multiple buyers vie to make the purchase. However, the search for one of the best homes in one of the top areas remains connected to everyday concerns that include the need for good schools, shops and services. For obvious reasons access to work is lower down the list, since many of the wealthiest do not work, rather their capital works for them. The underlying requisite is that locational advantages should be of most luxurious quality.
These various factors mean that the preferences of wealthy corporate captains looking for a place to live will be quite different from those of oligarchs looking for a home in the city, or of super-rich royals from the Middle East looking for a bolt-hole to visit for just a few weeks a year. Such varying motivations have helped create a variegated residential landscape, from the lively, cultured spaces of the well-heeled in South Kensington or Chelsea, to the apparently lifeless new apartment blocks and windswept plazas of much of the city’s waterfront, notably at Vauxhall Nine Elms, which seems to offer simply a secure base from which to sally forth into the wider city. To understand this landscape we need a field manual that offers a guide to the varying tastes, nationalities and backgrounds that combine in particular areas of the city.
The alphahoods form a distinctive social mosaic in the city, each with distinguishing features based on the groups that occupy them. The first, and perhaps most pre-eminent cluster is what we might describe as the patrician heartland. This is the clearly demarcated space of the city’s traditional West End, and what most will imagine when they think of London’s rich. This area is the home of established wealth and the distinguished, but it is also a place of contest and change as newer and much richer groups have sought entry, with longer-term locals feeling as though they have been elbowed out by the new money. Its heartlands are the unambiguously magnificent districts that London’s rich have long occupied, alongside ambassadors, embassies, charming restaurants, mews houses and unique expensive shops.
The West End is the long-standing territory of the UK’s aristocracy, its landowners and its well-to-do, alongside, since around the 1970s, new groups from the Middle East, Europe and then central Asia, who began to challenge establishment dominance of these districts. The area’s stucco terraces form the shell-like edges behind which one can find more intimate mews properties and comfortable back streets. These smaller terraces originally housed servants and horses but now accommodate some incredibly affluent households, if not perhaps the super-rich. Longer-standing wealth in the heartlands is also interspersed with a more complex geography of residents who bought homes when the area was relatively cheap, in the 1970s, and the legacy of this is that these areas are not simply the exclusive terrains of the super-rich. Many residents value this diversity, even if perhaps its range is sometimes overstated.
In the patrician heartland, the ambience is characterised by a sense of residential calm behind the key super-cosmopolitan and often very touristy streets of the Brompton Road or Sloane Street, or the more sedate areas like Mount Street and Berkeley and Grosvenor Squares in Mayfair, where bespoke tailoring, subtle perfumes and confident demeanours can be found in abundance. This is a London of the rich that many will recognise – often via visits to Harrods food hall or Fortnum & Mason. Here it is easy to find crowds that include selfie-taking tourists, the occasional fur coat, dark glasses, micro-dogs and bespoke fashion. Nearby one may see the chauffeured deliveries of the immaculately dressed to department stores, restaurants and hotels. Strike back just a street or two, however, and one will find an enveloping silence in many of the avenues, terraces and stunning squares.
Wandering these zones, one might find it hard to believe such streets are in the absolute heart of a capital city. The main sign of life is a persistent flow of service staff – delivery vans for food and all manner of household goods, window cleaners, cleaners, private security staff, butlers, servants, nannies strolling prams, locksmiths, interior decorators appraising new commissions, personal trainers running with clients, those who manicure hair, nails or lawns, dog walkers – all making up the vast supporting cast of extras needed by the wealthy to make life a little more comfortable.
As the ranks of the global and national wealthy have expanded, the movement of the new rich into this area has also had the effect of deepening its privatisation – Knightsbridge may throng with the world’s rich but it struggles to fill the ‘local’ pubs that punctuate the backstreets to the rear of Harrods. Residents of Mayfair complain of empty homes next door and of having to look elsewhere in the city for more life. All of this gives the sense that neighbourliness is something that takes place among the more established but dwindling residents of this alphahood.
These areas accommodate new corporate chieftains, some in very expensive short-term lets, financiers, the self-made wealthy, the relatively few aristocrats who these days actually rank as super-rich, and the wealthier echelons of enablers including bankers, accountants and some politicians. The feeling generated here is of power embodied in stone and stucco. Eaton Square is perhaps the exemplar of this style and ambience, a place of symmetry and confidence and a sign of good breeding. This is what many of the world’s rich have in their mind’s eye when considering the purchase of a London property.
The patrician heartlands are interwoven with another alphahood, what we might call the ultraland. This is less a neighbourhood and more a series of islands formed of new mega-mansion blocks, the twenty-first-century equivalent of the older palaces built across much of London’s West End. Despite them mostly being apartment blocks the prices are eye-watering. These properties are rather like stacks of palaces, nested within state-of-the-art medium-rise buildings that speak of money and the need for privacy and security. These newer buildings create imposing, luxurious splinters that stick out within the patrician heartlands. In many ways they are the particularly visible manifestation of the new super-rich within the traditional areas of London’s rich. These new developments have been built on public land, or replace older large buildings that have been remodelled or rebuilt. Many have been built by maverick developers, often backed by international wealth. The brash internal excess is belied by the often austere and sometimes almost bunker-like architecture.
One Hyde Park is a particularly good example of how this kind of development has been used to further the advance of the new wealth elites into the territories of London’s traditionally wealthy areas. The story, as we saw in the last chapter, begins with the Candy brothers. Like a duo from a book of capitalist fairy-tales, the rapid ascendency of their star began with their meeting with Qatari Diar, the sovereign wealth fund assembled as a means of investing in global land and property assets to secure the future of a state built on fossil fuel supplies. The Qatari funders helped with the purchase of a site close to Harrods and Hyde Park that had been empty for several years. One Hyde Park is the house that gas built, which may sound unfortunate, unless you are sitting on the £1bn that the project reputedly made its developers. The cheapest one-bed apartment here would cost you around £4m; a night in one of the nearby hotels, around £600. Each residence (never call them flats) is shielded by bomb-proof windows, and street-level glass walls, the building’s doors are guarded by staff trained by special services personnel. ‘One’ is also connected by tunnels and supply corridors to the adjacent five-star Mandarin Oriental hotel, so that bespoke services can be offered to its part-time residents.
The overall aesthetic effect of One Hyde Park has been described as ‘junior Arab dictator’. Like many of these ultra-prime developments it comes with an array of services designed to compete with the public services and amenities outside – underground parking, a cinema, a spa, wine rooms, a conference/function room, a golf simulator and the perhaps rather unlikely presence of a library. Some residences come with panic rooms. Throw in deliveries from Fortnum’s and Harrods and one need never leave this gilded compound, staring instead from the elevated balconies overlooking Hyde Park itself. Taking out a mortgage to buy one of the most expensive apartments here for its reputed £110m price tag would mean monthly repayments of £469,000 (on a twenty-five-year mortgage at 3 per cent interest, assuming you have the £11m deposit). Simply living here for one month would cost you around £14,000 in service charges, which is just a little bit less than the national annual salary of someone earning the minimum wage (£15k). Such figures of course belie the fact that buyers come with cash in hand.
After the ultraland, the third alphahood is what is often referred to as prime London. This includes areas like Wimbledon, Hampstead and Highgate, the city’s inner suburbs that originally formed its outer fringes as it expanded in the nineteenth century. While many of these areas have populations of established wealthy residents, the changes of the past decade have wrought enormous social but also physical changes. In these areas the significant impacts of sales to the wealthy have created the feeling of a city perpetually under construction, here and indeed in the patrician heartlands. This means constant flows of construction-related traffic and workers, noise pollution, and the creation of newly enveloped and buffed-up versions of the existing eighteenth-and nineteenth-century homes and townhouses.
Portland Street in Holland Park is a good example of prime London, though it is currently a mobile building site slowly extruding perfect residences as the front line of ultra-gentrification extends ever further. The street is awash with builders, finishers, carpenters and others working around the conveyer belts that lift soil and rock from below-ground basement excavations. Further up the road is a cluster of ‘I saw you coming’ shops, happy to relieve wealthy incomers of their cash. Reports of irritated neighbours checking for cracks on partition walls abound here, as in other parts of the city affected by a thousand other such excavations.
Although they now sit firmly atop the prime London hierarchy, Notting Hill and Holland Park have seen changing populations and fortunes over several decades. One might watch a film like Antonioni’s Blow-up (1966) or his later The Passenger (1975) and catch glimpses of these areas as the run-down backdrops for louche characters and art-scene aesthetics.
Such popular depictions presented London as an exciting city of changing tastes and communities, alongside even more rapidly changing moral frames. The city’s party atmosphere of today, after the entrance of serious money, could be presented equally well using the backdrop of streets like Lansdowne Crescent, whose hulking somewhat tatty upper-middle-class residences were featured in the films.
This is the same area that Wyndham Lewis once described as Rotting Hill. Its earlier decline seems hard to imagine when walking the same streets today. Now one sees dwellings renovated to the highest specification, muscular cars and casual but expensively dressed drivers, giving off the impression, as some see it, of a place rightfully returned to the heirs of its original owners. This process of class restitution and reappropriation initially occurred through processes of gentrification in the 1980s and ’90s. More recently, the people buying into the area are those at the very top who have made room for themselves in what some describe as a process of financification. Massive homes, some as tall as seven stories, have returned from being sub-divided flats to single-family residences. Instead of David Hemmings in an open-top Jag casually stuffed with art, you are more likely to see only the faint outline of the driver of a Mercedes ‘G class’ jeep through its tinted windows.
In this and many other parts of alphahood London entire homes have been demolished and rebuilt to accommodate the art and lifestyles of the new rich – the sense of destruction and renewal is palpable. London is honeycombed with new and deeper basements and expanded spaces – for cinemas, servants, and even for cars. Attempts have been made to reconnoitre this subterranean landscape and the results have been surprising: nearly 5,000 basements created in the seven most affluent of London’s boroughs alone.1 One does not have to walk far through London’s prime districts to find evidence of such residential, and indeed capital, mining. The digs beneath patrician London have been met in some cases with fierce community resistance from longer-term residents. Stories of inundation, subsidence, cracks in walls, noise and small armies of workers who might be set in motion for a year or more, make new basements a very visible indicator of the thick skins of many of the wealthiest, thickened further by security details, good lawyers and planning consultants to defend their ambitious plans for expansion.
Ultralands: Clarges, Mayfair
To the city’s inner north, one of the most notable clusters of the prime alphahood consists of the wealthy areas that bridge the Highgate-Hampstead ridge. Here the topography of the area has combined with the scale of homes to price out those on lower incomes. From the hills one can enjoy a view of the city as panoramic as it was when the area comprised a series of villages overlooking the growing metropolis below. Walking the ridge one finds mansions, parks and leafy residential streets interwoven across an elevated landscape. These sections of prime London have long been colonised by the city’s upper classes, but they were traditionally, like their inner-city counterpart Chelsea, areas that made considerable space for the life of the mind, the arts and a host of bohemian characters drawn from the moneyed classes.
The attractions of the urban villages that constitute the prime alphahood is their proximity to the city, cleaner air and numerous large properties. Yet many of these have been remodelled or destroyed and rebuilt, much to the ire of longer-term residents and the area’s conservation societies, which have sometimes engaged in protracted battles to prevent what has appeared as a kind of erasure of history by money. With the increasing internationalisation of the community has come the further securitisation of homes and streets by apparently paranoid arrivistes.
The apotheosis of these transformations can be seen in the centre of Highgate village where Witanhurst house sits, the product of the fortunes made from soap by Arthur Crosfield in the early twentieth century. As mentioned earlier, this massive house lays claim to being the capital’s second largest residential home after Buckingham Palace. New money does what it wants, from behind imposing gatehouses or in large homes with private security staff, often appearing both to restore and destroy a property that is perhaps hard to describe as a home. This and other of the key alpha residences have the feel of warehouses for international wealth, ‘fuck you’ homes that highlight the fortunes of their owners while preventing either close scrutiny or integration into local community life.
Highgate has for some time attracted wealthy celebrities, including Jude Law, Kate Moss, George Michael and Liam Gallagher. What is interesting about many of the area’s more famous residents has been their general reputation for being a visible and active presence in the community. New and international wealth has an altogether more private and discreet presence in the area, with many locals bemoaning its changing character as a result. Alongside the increasing wealth, there has been the loss of public assets, as with its student hall of residence, now sold to property developers. The result is what feels like a wealthy and privileged district slowly losing its cosy ambience and becoming a more withdrawn, less trusting and less socially engaged place.
Following the descending roads back to the centre of the city and the Thames, we arrive at the city’s water riverlands, the waterfront alphahood. This is formed of an essentially the linear development of the city that hogs access to much of the length of the river as it winds through inner London. This is arguably the most international and newest of the alphahoods, primarily home to what might be described as the middle-and upper-tier wealthy from around the world and a focus for anonymous purchases by offshore companies. At sunset the Thames is illuminated by the reflections of a hundred thousand plate-glass windows on the facades of these massive new apartment blocks, almost the sole architectural form in this area.
Walking west from the revamped Vauxhall underground station, one can see the emerging skeleton of the Aykon building with its fifty floors and 450 apartments ranging in price from one to three million. Adverts for the development boast that it is one of the first attempts at the branding of a whole building, in this case using Versace designers for all of the block’s interiors. The building also has an entire floor devoted to a children’s play room. Also known as the Jenga building due to its offset storeys, the Aykon publicity stresses its unparalleled offer of space and amenities that are, in reality, being supplied by many other developments in the area. The danger here is that a new high-rise city is being built without taking into account the ingredients needed for a community or a coherent sense of place. Such criticisms will no doubt appear naïve to those who understand that the true function of these new developments is to help absorb global investment capital looking for a secure place to rest, rather than a coterie of new residents.
Riverlands’ waterfront
Walking further along the riverfront we pass St George Wharf, a mixed-use development built in 2007 with around 1,400 homes. It may seem a little cruel that this was twice winner of the Architects’ Journal worst building in the world award. The aesthetics of this section of the city has been increasingly shaped by the requirements of capital flowing into it; it is more a place to invest and grow cash than one in which to live. The riverlands, shaped by the interests of super-affluent international investors, are a wellspring of modular steel-infused monoliths containing stacked super-cribs. In many ways this is a landscape built by the agents of the super-rich, run for affluent investors and those planning a city future that appears like a kind of evil paradise for capital. The result is an uncanny space pregnant with a sense of social absence, an ultra flightpath estate for the alpha folk leading the vanguard of a property-led urbanism.
Beneath the residences of St George Wharf we find chain coffee shops, restaurants and a ‘London’ pub in a concrete shell. One unit houses an international estate agency; a glance inside reveals a large neon sign with the Gordon Gekko-like mantra ‘Property makes the world go round’. It is hard not to disagree. But this iron law of city life has created a windswept and uneasy landscape that seems a world away from the kind of community life and vitality displayed on the billboards of many of the sprouting developments. The Wharf is not alpha territory perhaps, more the prelude to the new and more gauche entrants a little further along. The next mile or two, to Chelsea Bridge, is the epitome of riverland style – a high-rise alphahood with windy micro-climates the only feature connecting the buildings.
At 594ft, the St George Wharf Tower is the largest tower block that many will never have heard of. Its massive height is belied by a tiny footprint that encompasses the sweep of a short driveway behind electronic gates and a hole in the ground marking the entrance to its underground parking amidst its small but manicured landscape. Foreign buyers make up two thirds of the owners here, many of them absent for long periods, and many of the units have been purchased through offshore companies. Here the oligarch Andrei Guriev reportedly installed an entire Russian Orthodox chapel in his penthouse apartment.
A little further on, the showroom for the new apartments at Embassy Gardens is a huge space filled with large models, couches and several staff. Malt whisky or bean-to-cup coffee are on offer to prospective buyers. This will be a new and diverse community according to the development’s brochures, though it is hard to imagine diversity with prices starting at £700,000 for a one-bed flat. With a new Dutch embassy near to the US embassy, the sales pitch here is the promise of a truly global neighbourhood, or what is sometimes described as a new geopolitical district.
This sense of prestige and place is stressed in some of the key features of the Embassy Gardens development, such as its ‘sky pool’ and rooftop garden – the kind of new spaces now being created as places of escape from the city, the rumpus rooms and walking circuits of the rich. The sky pool is made from super-heavyweight transparent acrylic and forms a liquid bridge holding a rather worrisome 50 tonnes of water between the two residential blocks, around 110ft above the ground – a cyclopean wet lens from which wealthy residents can survey the city below. The result yields a vision in the mind’s eye of a partying class of the international wealthy on rooftops across a string of high-rise alpha-blocks, like something from an imagined filming of a Ballard novel. Here architecture is used to emphatically express the occupation of the city by a global, free-floating capitalist class.
These key alpha developments offer a private, club-like landscape filled with bars and meeting rooms, spas, cinemas and rooftop gardens. These amenities are frequently presented as spaces of refuge from the city, sanctuaries within which residents can circulate among their own kind. At Embassy Gardens the development’s prolific features appear as antidotes to the sterility of the neighbourhood around it, perhaps also a response to the uneasy atmosphere generated by the heavily guarded fortress of the US embassy itself, with its submachine-gun-toting police patrols and visible CCTV pylons.
Continuing west along the river, one finds one’s way barred by the perimeter of the Battersea Power Station redevelopment. Here the scale of the power station’s carapace retains the capacity to generate a real sense of awe. Its towers and numerous cranes signal a returning wave of capital, washing back over the built environment, seeking out devalued spaces to reintegrate and generate value from in the hot circuit of London property development. Yet this is also a zombie in the making, as capital reanimates the dormant structure originally designed to evoke a massive cathedral. This feeling is reinforced by the impression that many of the flats that were flipped in a frenzy before even being completed are either unsold or generating losses for those who dived in early. Now the development’s rebirth as a luxury housing, retail and office complex gives the feel of industry with the symbols of Silicon Valley bolted on. It seems that those buying here are mostly people who have too much cash to care about the risk of a market downturn, which perhaps says as much as anyone could about the state of the city’s malfunctioning property market.
Decommissioned in the 1970s, the power station building languished until 2011 when Malaysian sovereign wealth money stepped in; this was the last major prime development site left in central London. The future will tell whether the area will become the city’s new tech valley – with Apple still pegged to be an anchor office tenant in the main building – or a salutary lesson in the folly of chasing foreign investment capital with bad timing. Of the 25,000 units in the district, only 600 were designated as affordable (itself a laughable token when pegged at 80 per cent of market rates), a number described as ‘loads’ by the former mayor Boris Johnson.
From Nine Elms one can look back to the East and be granted the grand reveal of the numerous new towers on the river’s edge, a luminous glass wall that conceals pockets of public housing, railway lines, a few remaining greasy spoon cafés and the older terraced housing behind. Rather like dead mackerels the luxury high-rise developments shine but they also stink, the odour generated by investment-focused planning agreements and a housing system out of sync with the needs of ordinary folk in the city. This is the contribution that capital makes when unleashed from any sense of public mission or meaning, when plans and places for people are negotiated away by aggressive developers who see public or affordable housing as unicorn products when a dollar more can be made from selling at the maximum rate. The districts here combine the look of premium homes by a volume house builder with a dash of Dubai.
The final alphahood is the more dispersed geography of homes and neighbourhoods that make up the suburban exclaves, primarily those environs to the west of the city, among which Cobham, Esher, Gerrards Cross, and beyond, Henley stand out. Many of these super-affluent towns and villages are places of long-established wealth that have come to accommodate ever richer residents. They are commutable but more or less ex-urban districts in look and feel. Here are ‘excellent’ fee-paying schools, and a limited offer of clothing boutiques, wine merchants and bespoke shops.
The suburban exclaves are an enclosed and super-comfortable land of private golf courses, unfeasibly large executive homes, dinner party circuits and strings of gated communities to protect the more anxious among the super-rich. Alongside them live their more relaxed counterparts from show business and media, and a handful of the aristocracy in comfortable piles. This is a fragmented and socially diverse scene of old and new money, sometimes rubbing along in a fractious way due to disputes over home extensions and unfeasibly scaled reconstructions. Whereas expansion in the conservation areas of central London goes by way of burrowing down, an exclave home more often expands outwards.
In Cobham’s town centre a small mosaic monument marks the historical presence in the area of the Diggers. It was they who in 1649 brought their vision of equality to the nearby St George’s Hill, Weybridge. This feels like a jarring juxta-position – between the Diggers’ ideals of land and prosperity for all and the fierce enclosures of domestic space and private land that now make up this and the other super-affluent towns of the region. The exclaves could be described as London’s Cheshire (or perhaps Alderley Edge is Cheshire’s Cobham) – a place of wealth on show, enormous cars, sun tans, footballers, lottery winners and the international wealthy drawn to a simulation of rurality and community. More often this is an anxious landscape, conspicuously secured by gates and electronic eyes.
Gates across some roads open if one waits long enough, but the symbolic intent is clear – you don’t live here or belong here. As a visitor it is hard to shake the feeling that one is being perceived as a potential risk. This is arguably the most private landscape of the alphahoods, with its standing guards, private security patrol vans, threatening signage and service staff being buzzed through the gates of large detached homes. All generate the feeling of a space designed to be out of bounds to the wider population.
Taking the West (End)
The impact of the rich on London’s housing extends way beyond the homes they live in or buy each year. Their injections of cash, detached from any concern with economy or frugality, drive up prices in residential markets that were once generally geared towards the merely well-off, displacing the latter’s offspring over time. This has an unpleasant trickle-down economic impact which can be quantified. One way to think of it is as a kind of stealth tax that few people know about but which all Londoners pay as a result of the over-heated and over-priced housing market. This has been calculated as amounting to around £30,000 on the average London home.2
The logic of owning luxury goods is not only that you deserve them, but that in owning them no one else can have them. Who indeed would wish to be second best? With unlimited wealth who would want to be seen owning, driving or residing in something that other people have? This is what is known in economics as a positional good; rarity or singularity confers a kind of social standing, and access to it is dependent on one’s resources and perhaps a little luck in timing.
We must remember that many neighbourhoods have more or less stable populations, and in some of the most affluent areas properties come up for sale infrequently. This makes their status as positional goods even more emphatic – the fact that it is difficult to get the right house in the right place leads directly to the over-pricing of homes when they are sold. For the wealthy in search of status-conferring property, purchasing a rare, highly desirable home is key. There is only one Eaton Square, one One Hyde Park, one Witanhurst house.
Homes on the ‘best’ streets command enormous premiums compared with homes of similar sizes in other areas. House prices over the past decade – at first seemingly lost in the doldrums of a post-crash world and then rising rapidly in a resurgence associated with international buyer interest – give an indication of the degree to which the rich are prepared to throw capital at property assets. This was in large part generated by the curious fact that the wealth of many of the richest was not only untouched by the global financial crisis but was very quickly augmented by it. This meant they had cash to burn on whatever assets looked ripe for the picking. One of the notable stories that followed the result of the last general election was the almost immediate sale of a home for £65m in central London.
The internationalisation of the property market has connected otherwise sectional interests, spanning the political, property and finance sectors. Its effect has been to galvanise those involved in the different areas of construction, sale and financing of development activity, and the economic and regulatory environment that surrounds these processes. Property of course also generates returns to the class of enablers. The capture of the city operates here via the discreet ways in which the political administration works hard to create an investment and construction climate that will lure the rich and capital in general. Despite increases in stamp duty on property sales in 2014, London still has one of the lowest property tax environments globally.
Housing has been one of the primary means by which capital has invaded and taken over London. Without enough political interest in who is buying these homes it has been possible for the rich to generate an unchecked demand for property. With near unlimited resources the rich can purchase more homes and space than they need, an over-consumption that is reflective of both the gigantic returns to, and the newfound riches of, the global wealthy. But, more than this, their choices represent flows of capital looking for a safe bet. It is to these alphahood areas that capital is steered by real estate agents and the property buyers employed by the rich. Good money follows good and so becomes clustered in a handful of ‘lucky’ cities globally.
London’s property system is, in reality, a politically managed operation designed to benefit capital and those who hold it, mediated and supported by a set of ideas that gives primacy to the role of markets and private property as the fundaments of a successful and vibrant city economy. Thus the hyper-consumption circuit of expensive homes feeds a subtle capture of the city by capital. Whether such a gravy train can or should continue is another question. After much uncertainty, the political direction of travel now points toward a lax regulatory environment, low property tax and a vision of the city as a place for investment and the wealthy.