I've always wondered how much of this is paid for by oil money. How much of it is the result of middle eastern sheiks needing to find a place to store the oil wealth they've plundered from their countries?
"Perhaps the most striking fact about One Hyde Park and the London super-prime property market is what it tells us about who the world’s richest people are. Many people think the greatest winners of globalization today are financiers. A decade or so ago, that may have been true. But today another class sits above even them—the global commodity plutocrats: owners of mineral rights, or dominant players in mineral-rich countries in sectors such as construction and finance that benefit from commodity booms. Hollingsworth notes in Londongrad that the oligarchs he studies became rich “not by creating new wealth but rather by insider political intrigue and exploiting the weakness of the rule of law.” Arkady Gaydamak, a Russian-Israeli oilman and financier, explained his elite view of accumulating wealth to me in 2005. “With all the regulations, the taxation, the legislation about working conditions, there is no way to make money,” he said. “It is only in countries like Russia, during the period of redistribution of wealth—and it is not yet finished—when you can get a result. . . . How can you make $50 million in France today? How?”
Russia’s former privatization czar Anatoly Chubais put it less delicately: “They steal and steal. They are stealing absolutely everything.”
London real-estate agents confirm that these commodity plutocrats dethroned the financiers some time before the financial crisis hit. “I can’t remember the last time I sold a property to a banker,” says Stephen Lindsay, of the real-estate agency Savills. “It’s been hard for anyone to compete with the Russians, the Kazakhs. They are all in oil, gas—that is what they do. Construction—all that kind of stuff.”
Even the Arab money has taken a backseat to the new buyers, says Hersham. “The wealth of the ex-Soviets is incredible,” he says. “Unless you are talking about [Goldman Sachs C.E.O. Lloyd] Blankfein or [Stephen Schwarzman], the head of Blackstone, or the head of one of the very big banks, there is no driver from the City of London at these levels anymore.”
The ironic thing is that with the "exclusivity" of neighbours like that, you'd have to pay me to live there.
It's disappointing how little interest the government has taken in taxing the ridiculous capital gains resulting from the high-end London property bubble; these "investors" probably contribute less to the British economy per pound earned from their speculation than anyone else, and in many cases it's a similar story in their homelands
Reading this makes me glad that South Africa retains exchange controls for larger sums of money. The cash may be plundered but it doesn't get siphoned offshore, so there is a realistic chance of it being recovered when the political wheel turns, and the next faction takes power.
And they bury that on the last page!
Furthermore, it's striking how the City was almost set up to help dictators plunder their country and save the plunder for when they get overthrown. Nasty, and my naive, trusting bourgeois British eyes open further.
Take a drive past Harrods one day when the in-town princes have their UAE registered Bugatti Veyrons on display. That's right, they fly their million-quid cars into London so they can show off. And there is much more than just one or two of these guys.
