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23 July 2022

The building that remade London

One Hyde Park was meant to represent hope after recession almost ruined Britain’s property market. Its legacy is far more uncertain.

By Emma Haslett

On a chilly Wednesday in January 2011 Bernie Ecclestone, Gary Lineker and 350 other guests assembled at the former site of the unloved 1960s office block Bowater House, just down the road from Harrods on Knightsbridge, west London, to celebrate its new incumbent: One Hyde Park. The building’s developers, Nick and Christian Candy, had spared no expense in launching what the marketing blurb had dubbed “the most exclusive address in the world”. Their guests sipped champagne and dined on food prepared by Heston Blumenthal as 5,000 golden balloons were released from the roof and a detailed ice sculpture of the building glistened in the winter sun.

Most of One Hyde Park’s 86 luxurious taupe-on-taupe apartments had already been sold, to a secretive list of customers that was rumoured to include a Russian oligarch, an Arab sheikh, a Nigerian oil billionaire and a Kazakh pop star. Designed by the firm of Richard Rogers, who had brought a new aesthetic to Paris with the Pompidou Centre and London with the Lloyd’s building, they overlooked Hyde Park and the Serpentine to one side of the building, and the shops and restaurants of Knightsbridge to the other. The American artist James Turrell had been commissioned to create a lighting scheme. Security was provided by former SAS agents and bulletproof glass.

The party was the culmination of six years of development. Since the Candys had submitted their planning application in 2005, every detail about One Hyde Park had been reported as a new standard in luxury: the building was one of the first in London to include a car lift, into which residents could drive their McLarens and Lamborghinis, which would be whisked into the basement at the touch of a button and parked by a waiting chauffeur. Other amenities included a 21m “ozone” swimming pool, a gym, squash court, private spa and golf simulator, and a private cinema. Each apartment came with in-house maid service, room service from the adjoining Mandarin Oriental Hotel and a private, temperature-controlled wine storage facility. Separate lifts ensured residents never had to share one with their staff.

The most eyebrow-raising detail of all was the price. Years before the building was finished it had begun to break records, smashing through the hitherto-unachieved levels of £4,000 per sq ft, then £5,000 per sq ft, in off-plan sales. By the time it opened apartments at One Hyde Park were topping £7,000 per sq ft. Most of the sale prices for apartments, and the identities of their buyers, were obscured by confidentiality clauses and corporate envelopes, but one 2011 entry in the Land Registry revealed that a flat had sold, undecorated and unfurnished, for more than £135m.

The Great Recession had nearly caused the collapse of Britain’s property market, and the launch of One Hyde Park, four years later, represented a new hope for the industry. The rich bounced back first, and highest, from the global recession. London found itself at the centre of an influx of global capital as newly-minted billionaires from Russia, China and elsewhere sought to invest away from the prying eyes (and sticky fingers) of autocrats.

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In the aftermath of the financial crisis, London was desperate for cash to fund the bottom end of its housing market. The Mayor of London, Boris Johnson – who opined in 2013 that the super-rich deserved “thanks for the prodigious sums of money that they are contributing” and that the ten wealthiest people should get “automatic knighthoods” – was among those who saw One Hyde Park as the beginning of a new era of trickle-down economics. The wealthy elite would spend their money in London, creating jobs and prosperity.

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One Hyde Park, and the imitators that followed, did entice the wealthy elite to the capital: between 2008 and 2014 the number of people in London with a net worth of more than $30m rose from 2,755 to 4,063, according to the data company Wealth-X. But the crumbs that fell from their table were limited. In the past ten years, Land Registry data shows, house prices have risen by 81 per cent in the capital; yet inequality remains huge, with those in the top 10 per cent of earners holding 44 per cent of the wealth, according to the Trust for London, an inequality think tank.

And although the world’s elite has begun to return to the capital, Russian oligarchs, one of the groups One Hyde Park was aimed at, have been frozen out, while newer, flashier developments in other parts of London are drawing the eye of the next generation of billionaires. Will One Hyde Park leave a lasting legacy, as the Candys intended, or will it fade into the background, just another audacious attempt to grab ultra-rich foreigners’ money in a city where everyone wants a piece of the pie?

To understand One Hyde Park, you must first understand its context, says Liam Bailey, head of residential research at Knight Frank, one of the estate agencies that marketed the building. “London’s luxury sector, long an international market, suddenly expanded rapidly on the back of a global wealth surge,” he wrote in a November 2011 report on its success. “Buyers from Russia and the former CIS [Commonwealth of Independent] states – hungry to invest in assets outside of their home markets – began to arrive in London.”

This new breed of international buyer wasn’t interested in the draughty old Mayfair townhouses that had traditionally formed the top of the London property market. “Very simply, the new global super-rich did not do stairs,” he wrote.

One high-end estate agent says that until One Hyde Park came along “there wasn’t the choice and opportunity” his clients wanted. “It changed customers’ expectations.” The agent remembers One Hyde Park’s launch as “a really exciting time for development”. It “set a new benchmark in terms of things like facilities within the building”.

A decade on, Bailey adds: “[London had] the infrastructure that people talk about as being attractive to wealthy residents: good schools, shopping, restaurants, lifestyle. The new international buyer who emerged at this time increasingly wanted to live in the same way as wealthy people do in big cities around the world – in large apartments.”

The Candys had been early to recognise that they were targeting a new class of ultra-rich nomads, with residences in multiple cities. “The One Hyde Park model is that you more or less fly in and stay in, shopping at Harrods and Tiffany’s or whatever, and then you exit again,” says Rowland Atkinson, research chair in inclusive societies in the University of Sheffield’s department of urban studies and planning.

That lifestyle became the source of ire for many of the building’s fiercest critics, who objected to the fact that many of its flats were left unoccupied. At night the block was dark. “Not just a bit dark… but black dark,” wrote John Arlidge in the Sunday Times. “The doorman stares blankly forward… there’s nobody to tip his black bowler hat to.”

The new super-rich didn’t really move to London because they didn’t really live anywhere permanently, and their cash, rather than trickling into the local economy, remained behind the bulletproof glass. “London became a kind of safe deposit box for investors,” says Will Wiles, an architecture critic and author.

Nevertheless, developers across the capital were inspired by the success of One Hyde Park: they began to vie for high-end international clients by building so-called “turnkey” properties, which were opulently furnished and ready for residents to turn up to with a toothbrush and not much else. Glass and steel residential buildings sprang up across the capital. The developments around Battersea Power Station and Nine Elms Lane, which became known as “Dubai-on-Thames”, came to represent a form of high-end living (one development in the latter boasted a bridge-like “sky pool”) that is totally unreachable to most Londoners.

By 2018 well over half of prime central London homes (54.6 per cent) were bought by foreigners, according to data from Hamptons International. One Hyde Park may not have started this trend, but with its darkened windows it was its most conspicuous example.

Nine months after the launch, in November 2011, council records showed that only nine of the 62 apartments sold at One Hyde Park had been registered for council tax, with five of those paying the 50 per cent discounted rate used for second homes. At the time council tax was £755.60 a year, plus £619.64 to the Greater London Authority. 

Analysis in 2012 by the International Consortium of Investigative Journalists found that 80 per cent of the apartments had been bought in the name of offshore entities, the majority of which were registered in the British Virgin Islands. Last month the Telegraph reported that one of those owners was Alexander Ponomarenko, a Russian oligarch thought to have paid £60m through a company registered in the British Virgin Islands for a “whole floor” at the development. Ponomarenko, who is on a UK sanctions list and “has not been seen at the block for some months”, is also thought to have bought a $350m palace on the Black Sea for Vladimir Putin, the Russian president. A second sanctioned oligarch, Farkhad Akhmedov, whose ex-wife, Tatiana, was awarded £450m, one of the highest English divorce payouts in history, in 2021, is thought to have paid £29m for an apartment for his then-teenage son in 2013.

The block’s architecture was also questioned. The hiring of Rogers promised flair and originality. At the time of its launch the Guardian architecture critic Rowan Moore damned it with faint praise, writing: “I’m not outraged”. Wiles is less complimentary. “It’s a profoundly boring building,” he says. “I mean, it’s a row of computer servers. It’s not a good Rogers building by any means.”

One Hyde Park, a “row of computer servers”. Photo by Simon Dawson/Bloomberg via Getty Images

“The effect that money has had is to produce this new skyline in the city that many people find alienating, that hasn’t really accommodated many people at all,” says Atkinson.

Determining the effect One Hyde Park and its copycats had on the London property market is difficult. “It’s important not to be crude in the causality,” says Atkinson. It is certainly true to say, however, that as capital poured in at the top end, the bottom end was also undergoing a transformation. The financial crisis had led to “a decade of austerity and cuts,” says Atkinson. On the day in 2010 that Peel House, One Hyde Park’s affordable housing provision (off-site, naturally), was opened by Boris Johnson, the coalition government happened to slash public spending by £6.25bn, including cuts to the housing budget.

As Atkinson points out, One Hyde Park didn’t cause those budgets to be cut. Nonetheless, it was happening. The post-crisis influx of the ultra-rich into London coincided with a period of rapid fall in the amount of council housing available across the UK: by 2011 there were just 1.7m council houses available, down from 2.8m a decade before. Rising house prices have had a knock-on effect at the bottom of the market, where there is now a lack of council housing to fall back on, says Polly Neate, chief executive of the housing and homelessness charity Shelter.

“Decent homes that people can afford to live in are a rare luxury in London. House prices are completely out of reach for most and extortionate private rents are pushing even more people out of their local areas and into ever shoddier homes,” says Neate. “Hundreds of thousands of Londoners are forced to live in poor-quality, overcrowded and unstable rentals that are damaging their lives and health.”

Even at the middle level of the market people were beginning to struggle. “Someone quipped a few years ago that the housing crisis happened because it started to affect Telegraph journalists,” says Wiles.

Average house prices in the capital have risen from £287,983 in January 2011 to £517,530 in January 2022, according to the Land Registry. Meanwhile, the number of new homes in London sold for over £1m has spiked, from 2.5 per cent of sales in 2011, to 12.4 per cent in 2020, according to New Statesman analysis of Land Registry data.

Rental prices have also spiralled: one survey, by the trade union GMB, found that between 2011 and 2017 the average rent for a two-bedroom flat in the capital increased by 25.9 per cent. Wages increased by just 9.1 per cent over the same period. In England as a whole rent went up 18.2 per cent and wages 9.8 per cent.

Atkinson agrees that people higher up the property food chain are increasingly becoming concerned about the future London is facing. “Those people who have gained property wealth are increasingly anxious about where their children live, and what their children’s pension situation is going to be,” he says.

He points to a leader in the Spectator in September 2021 that voiced fears about the “assetocracy” and bemoaned the property wealth accumulated by pensioners. “There are plenty of people on the traditional political right of the spectrum who see their personal gains as more or less illegitimate," Atkinson says. "They see it as being fundamentally unfair.”

Nick Candy doesn’t think One Hyde Park’s success could be repeated. Earlier this year he told the Times: “I don’t think there’s enough demand from buyers. There’s only a certain amount of wealthy people in the world that want to come to one city. London had that in 2011.”

He’s right, says Wiles, but it isn’t just demand that would prevent a repeat. Since One Hyde Park opened, and since the cluster of developments around Nine Elms were given planning permission, tastes in London have changed. Similarly sleek glass and steel designs might not pass muster these days. “Architectural tastes have become more conservative. That sort of modernist block wouldn’t fly now,” says Wiles. “London’s built environment has become overall a bit more staid and bricky.”

In 2010 Boris Johnson presided over the London Housing Design Guide, a set of design guidelines which “put the brakes on One Hyde Park style development”, says Wiles, effectively banishing glass-and-steel residential blocks. “Nowadays, One Hyde Park would be brick. It was not architecturally influential for very long.”

Meanwhile, the government has been finding ways to crack down on the “Lights Out London” trend, with rules that make it harder for foreign buyers to simply stash their cash in the London property market. In 2013 George Osborne, as chancellor, introduced rules on homes worth more than £2m, hiking stamp duty to 15 per cent for those bought through a “corporate envelope”. The following year he applied similar rules to homes worth more than £500,000.

Last year they were expanded again, with a 2 per cent surcharge to overseas buyers of property in the UK. As a result, the proportion of prime central London homes bought by foreign buyers in the first half of 2021 was just 27.2 per cent, according to Hamptons International, about half the 2011 percentage. The number of people with wealth of over $30m in London has dropped to around the same level it was a decade ago: in 2011 it was 3,082; in 2021 it was 3,086, according to Wealth-X.

Nick Candy told the New Statesman: “It is fair to say that London faces a housing crisis, as measured by affordability, but this pre-dated the arrival of One Hyde Park and has outlasted the development. It would also be inaccurate to suggest that the construction of a few thousand super-prime properties in London over the past two decades is to blame for the housing crisis.

"Other larger and more pertinent issues need to be taken into consideration such as wider market delivery, the planning process, the ability to unlock land for large-scale development, and the role local authorities can play in the supply of affordable accommodation.”

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He’s right: a decade on, the experiment is hardly over. Savills expects prices in London’s most upmarket areas to increase by 8 per cent this year and 4 per cent in 2023. Its research also shows that, post-pandemic, the ultra-rich are beginning to return London. One indication is provided by supercars, it says. Just under 800 new Aston Martins, Bentleys and Rolls-Royces were registered in the capital in the first quarter of 2021, compared with about 300 in the second quarter of 2020. Meanwhile, in the first quarter of 2022 more than 128 homes worth more than £5m were sold in London, 25 per cent higher than during the first quarter of 2021, according to Savills. (Although buyers seem much more willing to haggle: the average price was £8.9m, 18 per cent lower than the year before.)

The Russian clients who were living the high life in “Londongrad” in the early part of the previous decade beat a hasty retreat earlier this year, fleeing to Dubai where, says one estate agent who works with high-end clients in London, “they feel much more welcome”. In the UK, sanctions mean they can no longer pay the staff who once serviced their sprawling apartments, or the schools their children once attended. Even if they were still here he probably wouldn’t bother showing them One Hyde Park.

“It’s aged poorly – the balustrading particularly,” he says. “The curtains have to be closed because everyone can see in. Would I take a client around it? Possibly not, because there are better schemes out there.” He cites the Whiteley, the redevelopment of the old Whiteleys shopping centre in Queensway, the other side of Hyde Park, and 20 Grosvenor Square in Mayfair, a collaboration with the Four Seasons Hotel, as examples of developments his clients find more attractive. Both are by Finchatton, a duo who were once known as the “next Candy brothers”.

Another estate agent is less discreet: “[One Hyde Park] is like a funeral parlour. I would sooner eat hornets than go and live in there.”

Perhaps the clearest sign of its waning reputation is the fact that, last year, Nick Candy put his 18,000 sq ft penthouse at One Hyde Park up for sale for £175m – or about £9,700 per sq ft. True to form, that price would make it the most expensive flat sold in the UK.

It’s fairly clear, though, that any hopes that Londoners would benefit from the wealth of One Hyde Park’s residents have not been realised. “We’ve had now 40 or 50 years of experience of a trickle-down economy, and I think it’s pretty evident it’s something of a fraud,” says Wiles.

The well-meaning politicians who welcomed One Hyde Park’s billionaires to London misunderstood their intentions. “The entire point of London as an investment destination wasn’t to do with [wealth] trickling anywhere,” says Wiles. “It was to do with keeping things safely frozen up.”

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