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Wealthy foreigners are mopping up property in rich London neigbourhoods but have no time to stay in them, turning these posh localities into ghost towns
An odd thing was happening, or rather not happening, as dusk fell across London's Belgravia, home to some of the world's most valuable real estate: almost no one seemed to be coming home. It seems that 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 per cent of people buying property in the most expensive neighbourhoods 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 said that there were two English people on her street, and it was hard to tell whether many of her neighbours were there or not there. "French, American, Petra Ecclestone" - the daughter of Bernie Ecclestone - "and Russians, " said the resident. She asked that her name not be used because, she said, she was scared of the Russians.
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. "Many areas of central London have become prohibitively expensive for local residents, " a Smith Institute report said. "Some of the richest people in the world are buying property here as an investment, " says Paul Dimoldenberg, leader of the Labour opposition in Westminster Council. "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. "
In its report, Savills found that in 2011-12, 34 per cent of people buying residential properties in the resale market in prime areas of London were from overseas, up from 24 per cent in pre-crisis 2007. In the most exclusive spots, foreigners accounted for 59 per cent of the sales.
This has made parts of London more international, more expensive and emptier. A salesclerk at a Belgravia clothing boutique said that at some times of the year the area was virtually abandoned. "We'll shut for the whole of August, " she said. 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, 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. Of new properties in "ultraprime" apartment complexes, 78 per cent of purchases last year were made by foreigners. Brokers are marketing new properties abroad in places like Hong Kong and Singapore even before advertising in Britain.
The most visible, and also the most notorious, of the new developments is One Hyde Park, a $1. 7 billion apartment building of stratospheric opulence on a prime corner in Knightsbridge, near Harvey Nichols, the park and the Mandarin Oriental Hotel, which functions as a 24-hour concierge service for residents. Apartments there have been purchased mostly by foreign buyers with hidden identities. It is rare to see anyone coming to or going from the complex. Vanity Fair reported recently that as far as it could discern after a long trawl through records, the owners seem to include a cast of characters who might have come from a poker game in a James Bond movie: a Russian property magnate, a Nigerian telecommunications tycoon, the richest man in Ukraine, a Kazakh copper billionaire, someone who may or may not be a Kazakh singer and the head of finance for the emirate of Sharjah.
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