It seems that practically the only people who can afford to live there don’t actually want to. Last year, the real estate firm Savills found that at least 37 percent of people buying property in the most expensive neighborhoods of central London did not intend them to be primary residences.
“Belgravia is becoming a village with fewer and fewer people in it,” said Alistair Boscawen, a local real estate agent. He works in “the nuts area” of London, as he put it, “where the house prices are bonkers” — anywhere from $7.5 million to $75 million, he said.
The buyers, increasingly, are superwealthy foreigners from places like Russia, Kazakhstan, Southeast Asia and India. For them, London is just a stop in a peripatetic international existence that might also include New York, Moscow and Monaco.
Along Elizabeth Street, home to a Poilâne bakery outlet and tony boutiques, foot traffic the other day was very slow. A Belgravia resident from Colombia, who was shopping at a pet store where dog beds go for $358 and cat blankets for $289, said that there were two English people along her street, and that it was hard to tell whether many of her neighbors were there or not there.
“French, American, Petra Ecclestone” — that would be the daughter of the Formula One impresarioBernie Ecclestone — “and Russians,” said the resident, considering those closest to her. She asked that her name not be used because, she said, she was scared of the Russians on the corner.
London is not the only city where the world’s richest people leave their expensive properties vacant while they stay in their expensive properties someplace else; the same is true in parts of Manhattan. But the difference is that so many of them here are foreign, and that they look to be buying up entire neighborhoods.
“Many areas of central London have become prohibitively expensive for local residents,” a recent report by the Smith Institute, a research group in London, said recently.
Paul Dimoldenberg, leader of the Labour opposition in Westminster Council, said the situation had reached a “tipping point” and was starting to concern lawmakers.
“Some of the richest people in the world are buying property here as an investment,” he said. “They may live here for a fortnight in the summer, but for the rest of the year they’re contributing nothing to the local economy. The specter of new buildings where there are no lights on is a real problem.”
In its report, Savills found that in 2011-12, 34 percent of people buying residential properties in the resale market in prime areas of London — places like Kensington, Chelsea and Mayfair as well as Belgravia — were from overseas, up from 24 percent in pre-crisis 2007. In the most exclusive spots, foreigners accounted for 59 percent of the sales.
This has made parts of London more international, more expensive and more empty. The salesclerk at a Belgravia clothing boutique, who also spoke on the condition of anonymity because she did not want to get in trouble, said that at some times of the year the area was virtually abandoned. “We’ll shut for the whole of August,” she said.
Many foreign purchasers are buying to rent, said Naomi Heaton, chief executive of London Central Portfolio, which represents high-end buyers. “There is a definite concern about ‘lights out London,’ ” she said, “but the reality is that half of what is bought is bought for rental.”
But not at the top end, said Yolande Barnes of Savills.
“The very wealthy won’t rent their houses out. Why would they?” she asked rhetorically. “It’s more like buying their own private hotel, really — an alternative to living in a suite at the Dorchester.”
Meanwhile, prices are rising beyond expectation. For single-family housing in the prime areas of London, British buyers spend an average of $2.25 million, Ms. Barnes said, while foreign buyers spend an average of $3.75 million, which increases to $7.5 million if they are from Russia or the Middle East.
Article source: http://www.nytimes.com/2013/04/02/world/europe/a-slice-of-london-so-exclusive-even-the-owners-are-visitors.html?partner=rss&emc=rss
