Super-rich foreigners price out ‘old money’
British elite can’t compete over prices for prime London addresses
LONDON’S “old money” elite are being priced out of their traditional neighbourhoods such as Chelsea, Mayfair and Hampstead by super-rich foreign buyers, a major study reveals today.
Central areas that were dominated for centuries by British aristocrats and top-earning professionals from banking and law are rapidly turning into often-empty “safe havens” for international capital, it concludes.
About half of properties in “prime” central London addresses are bought by foreigners, contributing to a 75 per cent rise in prices between the 2008 financial crash and 2014, although they have fallen back slightly since then.
The two-and-a-half-year study — the biggest of its kind — found that this process has forced the younger generation of wealthy families to consider moves to postcodes their parents and grandparents would have shunned.
Dr Luna Glucksberg, who conducted the research for the International Inequalities Institute of the London School of Economics and Political Science, said: “The study shows that the wealthy individuals and families that live in London’s most exclusive areas no longer feel able to compete at the top end of the capital’s property market. Instead they feel like they are being pushed out of elite neighbourhoods.
“For the first time, this elite group are buying flats for their children in areas they never would have previously considered. Families from Chelsea are buying flats for their children south of the river because they feel they cannot afford to buy anything nearby.”
This in turn was contributing to house price rises in areas such as Battersea and Clapham, she said. This process of displacement by sheikhs and oligarchs was also leading to feelings of “both overt and covert racism”, she added.
One South Kensington resident told Dr Glucksberg that her son and his wife had been forced to buy in Acton. The unnamed resident said: “So they’re very lucky compared to many young people, but John grew up in Kensington, and he would really like to stay in Kensington, but there’s no way they could have afforded the kind of house that they... well anything really because it’s just ridiculous, the prices.”
A study of Belgrave Square, where past residents have included the Dukes of Kent and Devonshire and Admiral of the Fleet Sir Charles Ogle, found that only three of the 30 owners are British.
Russian aluminium oligarch Oleg Deripaska owns a £75 million property there that was home to wealthy Tory MP and diarist Henry “Chips” Channon in the Thirties. It was then known as “Schloss Chips” and visitors included the Prince of Wales — the future Edward VIII — his wife-to-be Wallis Simpson and Winston Churchill. Other new residents in Belgrave Square include Ukrainian billionaire Gennadiy Bogolyubov and Qatari royal Sheikh Jassim.
The results of the study are being presented today at the Royal Geographical Society (with IBG) Annual International Conference. Dr Glucksberg said: “These are powerful individuals who are used to getting things their way. But if you live in a property next to one owned by an overseas buyer who rarely lives there or an international investor, there is little you can do to make them fix the gutter if they don’t wish to, even if it’s your house or flat that ends up rotting.”