Who lives in central London now?

52 per cent of all £2m+ homes in central London are bought by overseas buyers.

Who lives in central London now? Anybody who has strolled the stuccoed streets of Belgravia and the verdant squares of Mayfair will have inevitably asked this question. The streets are filled with imported supercars and the sound of foreign languages, not to mention the thoroughly un-British clothes, shops and restaurants. Belgravia, Knightsbridge, Mayfair and, to an extent, Chelsea are no longer desirable addresses for the well-to-do British, such is the extent to which their prices have been driven up by foreign buyers.

There has been a tidal wave of recent research to underpin this point. Earlier this year, Savills announced that all the property of London’s 10 most expensive boroughs are more expensive than the entire combined worth of Wales, Scotland and Northern Ireland. The capital sees more house deals in excess of £100m than anywhere in the world and in the past year.

Then, releasing its April figures, Knight Frank revealed that London’s ‘super-prime’ market had risen again – 0.7 per cent in April and 7.7 per cent over the past 12 months. This, estate agency revealed, was driven by foreign demand: 52 per cent of all £2m+ homes in central London were bought by overseas buyers from March 2012 to March 2013.

Last week, further research was published by WealthInsight that shows London contains the most multimillionaires (individuals with over $30 m) in the world and the third most billionaires after New York and Moscow. Savills say that 32 per cent of these individuals are not UK domiciled. In fact, only 45 percent of buyers in central London are UK nationals. 

Furthermore, anyone who has flicked their way through this year’s Sunday Times Rich List will have noted that most of the top 10 are not British born.

Most of this research tells us what we already know, but who are these overseas multimillionaires who are dropping £50K on an Eton Square apartment. Researching this is no easy task due to the amount of London that is owned through offshore corporate vehicles. Only after months of laborious research could Vanity Fair reveal who actually owned One Hyde Park – the capital’s most expensive condominium.

Of the research that has been published, it should come as no surprise that most overseas buyers are Russian. Knight Frank says that 33 per cent of purchasers of properties over £10m between 2010 and 2012 were Russian. In second place were Middle Eastern buyers at 15.4 percent – in 2012, buyers of properties above £10m, 6 per cent were Omani and 3 percent from both Qatar and Kuwait. Again, no surprises here to anyone who has visited Knightsbridge in the summer, a migration focal point when the heat gets too hot in the Gulf. Buyers from the US are further down the list at 7.7 per cent, but estate agents expect the number to rise significantly over the next five years as the dollar exchange continues to favour such buyers.

Predictable as this research may be, we know one thing – it is not the British who are buying central London. And, as long as prices rise, the more the central London becomes an exclusive domain available only to the capacity of international wealth.

But how long can this continue? Surely there is only so much someone can pay for a studio apartment in Belgravia and finite number of overseas shoppers. The truth is London has an international appeal not only for finance, tax and business, but also lifestyle, education and, importantly for some, political exile. As long as London retains this edge, the longer prices are set to rise.   

Photograph: Getty Images

Oliver Williams is an analyst at WealthInsight and writes for VRL Financial News

Photo: Getty
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The government needs more on airports than just Chris Grayling's hunch

This disastrous plan to expand Heathrow will fail, vows Tom Brake. 

I ought to stop being surprised by Theresa May’s decision making. After all, in her short time as Prime Minister she has made a series of terrible decisions. First, we had Chief Buffoon, Boris Johnson appointed as Foreign Secretary to represent the United Kingdom around the world. Then May, announced full steam ahead with the most extreme version of Brexit, causing mass economic uncertainty before we’ve even begun negotiations with the EU. And now we have the announcement that expansion of Heathrow Airport, in the form of a third runway, will go ahead: a colossally expensive, environmentally disastrous, and ill-advised decision.

In the House of Commons on Tuesday, I asked Transport Secretary Chris Grayling why the government is “disregarding widespread hostility and bulldozing through a third runway, which will inflict crippling noise, significant climate change effects, health-damaging air pollution and catastrophic congestion on a million Londoners.” His response was nothing more than “because we don’t believe it’s going to do those things.”

I find this astonishing. It appears that the government is proceeding with a multi-billion pound project with Grayling’s beliefs as evidence. Why does the government believe that a country of our size should focus on one major airport in an already overcrowded South East? Germany has multiple major airports, Spain three, the French, Italians, and Japanese have at least two. And I find it astonishing that the government is paying such little heed to our legal and moral environmental obligations.

One of my first acts as an MP nineteen years ago was to set out the Liberal Democrat opposition to the expansion of Heathrow or any airport in southeast England. The United Kingdom has a huge imbalance between the London and the South East, and the rest of the country. This imbalance is a serious issue which our government must get to work remedying. Unfortunately, the expansion of Heathrow does just the opposite - it further concentrates government spending and private investment on this overcrowded corner of the country.

Transport for London estimates that to make the necessary upgrades to transport links around Heathrow will be £10-£20 billion pounds. Heathrow airport is reportedly willing to pay only £1billion of those costs. Without upgrades to the Tube and rail links, the impact on London’s already clogged roads will be substantial. Any diversion of investment from improving TfL’s wider network to lines serving Heathrow would be catastrophic for the capital. And it will not be welcomed by Londoners who already face a daily ordeal of crowded tubes and traffic-delayed buses. In the unlikely event that the government agrees to fund this shortfall, this would be salt in the wound for the South-West, the North, and other parts of the country already deprived of funding for improved rail and road links.

Increased congestion in the capital will not only raise the collective blood pressure of Londoners, but will have severe detrimental effects on our already dire levels of air pollution. During each of the last ten years, air pollution levels have been breached at multiple sites around Heathrow. While a large proportion of this air pollution is caused by surface transport serving Heathrow, a third more planes arriving and departing adds yet more particulates to the air. Even without expansion, it is imperative that we work out how to clean this toxic air. Barrelling ahead without doing so is irresponsible, doing nothing but harm our planet and shorten the lives of those living in west London.

We need an innovative, forward-looking strategy. We need to make transferring to a train to Cardiff after a flight from Dubai as straightforward and simple as transferring to another flight is now. We need to invest in better rail links so travelling by train to the centre of Glasgow or Edinburgh is quicker than flying. Expanding Heathrow means missing our climate change targets is a certainty; it makes life a misery for those who live around the airport and it diverts precious Government spending from other more worthy projects.

The Prime Minister would be wise to heed her own advice to the 2008 government and “recognise widespread hostility to Heathrow expansion.” The decision to build a third runway at Heathrow is the wrong one and if she refuses to U-turn she will soon discover the true extent of the opposition to these plans.

Tom Brake is the Liberal Democrat MP for Carshalton & Wallington.