How the global hyper-rich have turned central London into a lights-out ghost-town

In an excellent NYT story, Sarah Lyall reports on "lights-out London" -- the phenomenon whereby ultra-wealthy foreigners (often from corrupt plutocracies like Kazakhstan and Russia) are buying up whole neighbourhoods in London, driving up house-prices beyond the reach of locals, and then treating their houses as holiday homes. They stay for a couple weeks once or twice a year, leaving whole neighbourhoods vacant and shuttered through most of the year, which kills the local businesses and turns central London into something of a ghost town.

“Some of the richest people in the world are buying property here as an investment,” [Paul Dimoldenberg, leader of the Labour opposition in Westminster Council] 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...”

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...

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 who hide their identities behind murky offshore companies registered to tax havens like the Isle of Man and the Cayman Islands.

It is rare to see anyone coming to or going from the complex, and British newspapers have been trying since it opened two years ago to discover who lives there. 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 Kazkh singer and the head of finance for the emirate of Sharjah.

A Slice of London So Exclusive Even the Owners Are Visitors [NYT/Sarah Lyall]

(via Beyond the Beyond)


  1.  You really want to be the guy squatting in a Ukrainian billionaire’s house ? The cops would never even be called and your body would never be found.   

    1. Here in America, if you leave your home unoccupied that long some hard-working entrepreneur will come along and strip out the copper wiring, plumbing and the aluminum. Metal prices aren’t regional, so I suggest that the industrious of London might consider giving these oligarchs a reason to invest in the local economy or get the f*ck out.

        1. It’s probably just more profitable on a railway or somewhere else without so many cameras.

        1. Casino Royale 1967?!  Holy jumpin’ Jesus, I had no idea who was in that film.  I’m getting it right now as we speak. Rotten Tomatoes says it’s rotten, but I’m going to watch it anyway.

          1. Screenplay by Terry Southern. You know, Dr Strangelove, Barbarella, The Magic Christian, Easy Rider,…

            When you watch the movie, you’ll see they have a lot in common.

            And I will now have the pitch-perfect pop overture by Burt Bacharach in my head all day. Oh the horns! The harpsichord! The strings!

          2. What in the wild world of sports?! How did I miss this film? I’m watchin it tonight I hope!

    1. Not to mention holiday homes in the southwest, to the great detriment of house prices and village vigour.  I’m blackly amused to see Second-Home Syndrome afflicting Londoners too.

      1. A guy I know grew up in a seaside home in Mevagissy, he’s a teacher now and had a grant to buy a house in the area. Do you have any idea of how much this kind of initiative solves the housing price problem in general?

  2. So Londonites are objecting to being treated the same way they treated The Colonies?

    1. Not aware of 18th Century Londonites using the American Colonies as vacation homes.

    2. Yep, in the same way native Americans objected to being treated by the new ‘Americans.’

  3. So, rather than provoke the ire of other influential Londoners, wouldn’t this be a great opportunity for the new owners to hire trustworthy house sitters to keep the lights on and the local economy suitably stimulated? I volunteer …

  4. Wait, so the wealth isn’t trickling down and stimulating the economy?  I’m shocked, I tell you!  SHOCKED!!!

    1. The wealth will only trickle down from the global super rich when we gut them. Cut open their swollen bellies and let their stolen wealth spill out over us all.

      1. I think there must be some kind of unconscious interplay going on between your social ideas and your name because that sounds delicious!

    2. Ironically enough, this is one occasion when it is. Selling expensive flats to foreign businessmen keeps builders employed and pours billions into the UK construction industry. This sort of thing is very good for the economy of the nation.

      Unfortunately, in central London the problem is a shortage of housing, not a shortage of wealth.

      1. If it is so good for the economy of the nation, why is the recovery from the recession(s) in the UK worse than the recovery from the Great Depression?

        And it strikes me as rather sad that Brits are being priced out of their own capital city.  I suppose the British elite feel more connected to Russian oligarchs and Middle-Eastern petro-princes than their own countrymen, but I doubt the average Brit does.

      2. Generally speaking, once it’s been built, the builders aren’t needed again for years or decades.  Builders aren’t in there building new buildings every day.  This isn’t Fraggle Rock after all.

        1.  Well, clearly you haven’t thought this through: we just sell them re rest of London! MOAR TRICKLES! The Oligarchs will save us all yet!

      3. Selling flats (expensive or not) keeps builders employed and pours money into the construction industry. (Likely rich) Developers will make more if the flats are expensive, the contractors not necessarily so. There is no need for these flats to be sold to the hyper-rich and in fact when the hyper rich buy them and don’t actually live there, they’re far less likely to be spending money than someone who chooses to actually live there.

        This is much more a case of the hyper-rich making other rich people slightly richer with very a small trickle down effect. It would be better for the nations economy if some cheaper (not necessarily cheap) buildings were being built by the same contractors, and then people lived there full time, spending money in businesses located in London, keeping Londoners employed, paying taxes and continuing that money spending cycle going on.

    1. This may be part of the asset bubble the ‘quantative easing’ is reputed to have created, which many now expect to burst. There are also invisible bank runs out of the EU, ie. getting money out of EU banks and into real estate at a safe distance. 

  5. I once accidentally wandered up the driveway towards the entrance of One Hyde Park, thinking I was still on the sidewalk.  The doorman politely guided me away. I guess I don’t look like a Ukrainian oligarch.

  6. Being a naive daydreamer I often ponder the workings of a true modern socialism. In examples such as this I envision: revolution first. handing mops and brooms to parasitic money-changers with the declaration “sweep or starve”  second and then as part of long-term methods of utilizing the pre-revolution assets of obscene wealth enact creative measures such as: use mansions and penthouses as vacation rewards for heroes of post-revolution construction. 

    Once we truly become responsible for our own destinies we will really need people to give all for the team. If there’s a nurse on your ward who gives 110% or a bin man on your block who routinely helps the elderly properly separate the recycling from the rubbish, there will be uniform ways to nominate such folk for a 2 week stay at the top of a Hyde Park penthouse.Who knows, once the major antagonisms of capitalism are eliminated we’ll all become so kind that we’ll even forgive the oligarchs (after a five year probation period) and if they have been sweeping the floors real good we might even allow them a few days stay in the penthouse that they formerly owned and never actually lived in.Or, we could just sate our thirsts on their caviare-soaked blood. 

    1.  When confronted with this sort of inequity, there’s a natural impulse to want to jump in and make it right. There is also a natural impulse to punish those who’ve misbehaved. Neither impulse is especially wrongheaded, and they each have to stand on their own merits. But I think it’s important to notice that they are two distinct impulses that don’t necessarily have anything to do with the other.

    2. Why not just wank it to a documentary on the Cultural Revolution or Pol Pot?  They did exactly what you are advocating and it worked out super awesome.  Communism is a horrible idea in theory and an even worse idea in practice.  The idea that a bureaucracy can manage an effective planned economy should send any sane person into fits of laughter, to say nothing of giving the state the power to enforce that kind of stupid and the obvious authoritarian regime that it unfailingly creates.

      Letting people pick out the ‘worthless’ folks and make them shovel shit is a pretty good way to gut your economy and bring all production to a screeching halt.  Engineers do a piss poor job explaining to a mob why they don’t need to be shoveling shit.

      Personally, I just take a boring old Scandinavian style welfare state.  Ensure that everyone gets enough to to be comfortable, slap down some progressive taxes to fight inequality and fund redistribution, and keep the business regulations light so that you can have a functional economy to fund the entire enterprise.  Boring, sure, but it is better than building fantasies that require forgetting the 20th century.

      1.  Yeah, that’s probably for the best, really. You know, actual middle-ground. It’s very hard not to keep a bucket-list of people who just need a good killing though, innit? Don’t pretend like you haven’t got one now…

  7. This is happening to Paris as well. One major effect on the real estate rape of our great cities by the super wealthy is the death of urban culture. Young people make noise and have to controlled by the security forces so the wealthy can go to bed at 11 pm. Paris is a ghost town after 11.

  8. The NFL and organizations are already being proactive and open if a player does it and if something negative happens. We’ll see what happens.

  9. I feel for those normal families aspiring to buy their $2.25 million homes and being priced out the market. Something Should Be Done!

    Meanwhile, poor people are going to be penalised financially if they have a spare room. But that’s all right, isn’t it.

  10. Worlds smallest violin for the British Upper Class selling themselves out of neighbourhoods.
    Forgeign gentrifier from Dalston reporting in.

  11. This is sad but if I hit the Lotto, London is the first place I would buy a house for occasional use.  Hotels are fine but nothing beats having your own place to clutter up and bumble around in.
    Detroit has fantastic houses for dirt cheap.  A lawyer friend has a 6,000 sf historic home with 10 bedrooms and baths that cost less than a shed in London.  Unfortunately, all you get is a house and land.  Functioning city not included.

  12. If I had a large lump of money to invest in real estate, I’d buy property along the coast of the southern third of Oregon, maybe even into northern California.  I never get tired of seeing those beaches.  I could get tired of London, and most of the cities of Europe and the U.S..  I think they’re great places to visit, but not to live in permanently. 

    1.  I adore London, but would only live south of the river. Much less hectic (mind you, I live right at the other end of the country, and my city has cows in the middle of it).

  13. This is also starting to happen in Vancouver. Housing prices are already ridiculous, and it’s made even worse by rich people willing to pay exorbitant amounts for condos downtown.

    1. I was just about to post the same thing… a big chunk of the city looks like a glittery ghost-town. 

    2. I saw that years ago along the Inner Harbour in Victoria. Many of those condos are owned by folks outside of Canada.

    3.  The absurd property prices in Vancouver are why I had to leave the city.  We made out like bandits on the bubble with our crappy little condo, but there was absolutely no hope of owning even an additional bedroom when our family expanded.  So we left.  Most of my neighbours are in a similar boat (now on the other side of a ferry).

  14. I wonder if this will lead to a revolt by the upper middle class a la Ballad’s Millennial People.

  15. It has seemed to me a generally sad thing that the best houses all over the world are the ones that are least occupied.  There is something broken with that.

  16. It’s a compliment to the UK.  The hyperrich of monarchies and kleptocracies and communist states and authoritarian regimes realize that their own country’s investment opportunities are suspect, and so they put their money in safe investments–e.g. Western real estate and bonds. Why do you think the US can go into such huge debt?  Our bonds are a safe haven.  Same for the UK and France and Germany.  

      1.  Depends. One of them dropped us a point, another just gave us AAA. Which is being trumpeted by the Coalition as vindication of their economic nous…

  17. “but for the rest of the year they’re contributing nothing to the local economy”
    Although the owners aren’t shopping or consuming, the sale would have been subject to stamp duty (7% for properties over £2m) and presumably they’ll have to pay council tax for services they’re not actually using.

    But then I guess there’s a difference between “local economy” and “local government”.

  18. Isn’t this a planning issue? In much of the UK planning restricts what can be built where. Councils write structural plans giving a 10 year plan for how their patch is to be developed, it will include things like the number of new builds and the number of affordable homes. The only problem Kensington and Chelsea is solidly right wing and probably like all the council tax they get from these properties.

    1.  It would be a planning issue if it involved poor people.  Plutocrats just buy whatever planning they need (directly or indirectly).

  19. Reminds me of the ghost cities in China where aging Chinese try to invest their savings in property.

  20. This isn’t a problem, it’s a symptom. Neoliberalism, now entering an imploding phase, is the problem. It will only end in tears, neo-feudalism, and not being able to afford a nice rat kebab for the holidays.

  21. solution:
    Crime.  bands of looters robbing these underpopulated ghost neighborhoods would simultaneously put downward pressure on values, distribute foreign wealth to lower class Londoners, and (best of all) require an investment in security infrastructure (private and public) that would provide a boost to the local economy.

    Every city has  little Detroit in them, sounds like London needs to dig deep and find theirs.

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