September 21, 2012 8:28 pm

Ghetto super-prime

The best areas have become bespoke airport lounges for the transitory super-rich
An illustration by Chris Rice©Chris Rice

The government in the UK has come up with an ingenious way for making the country’s wealthiest neighbourhoods even better.

The plan is simple but highly effective: sell off council-owned houses in nice areas and use the money to fund building more council houses in bad areas. The end-game, supposedly, is that the most expensive neighbourhoods become poor-people-free zones, while the government nets itself £4.5bn – more than enough to build prefabricated matchboxes for all of Britain’s low-income families.

Politicians have been snappy in their defence of the idea. Grant Shapps, housing minister, pointed out that the scheme was “blindingly obvious” and that only “a perverse kind of leftwing dogma” would stand in its way. Meanwhile, the man from the Policy Exchange, the think-tank behind the brainwave, was quick to point out that the idea was “good for fairness”.

The world’s super-rich, who, rather sensibly, have stayed out of the debate so far, must be beside themselves with excitement.

In asking the few remaining permanent residents of the country’s top addresses to politely leave, the government would create the promised land of high-end property ownership: a completely unoccupied neighbourhood. Already, huge tracts of London’s most coveted postcodes are virtual ghost towns. From Belgravia to Knightsbridge and South Kensington, the pattern is well established: buy a house, leave it empty for 50 weeks of the year, swan in for a fortnight and wear it like a haute couture accessory.

It’s not just a London phenomenon, either. In New York, Paris, Hong Kong and Mumbai, the best neighbourhoods are no longer really neighbourhoods at all. Instead, they have become bespoke airport lounges for the transitory super-rich as they hopscotch their way from one soft-touch tax regime to another.

Now, my access into this elite world sadly is restricted by the earning limitations of my chosen career. But I do have some useful suggestions for how the super-rich can make the most out of their soon-to-be-desolate neighbourhoods.

If you are going to use Knightsbridge as a summer hang-out, then inject some of the fun that you’d expect in a purpose-built holiday camp. Sure, the museums are alright, and nipping down to Harrods for a loaf is a bit of a gag, but the area has potential for so much more.

The empty streets could be turned into amusement zones with Moët-lubricated water slides, ball pits filled entirely with Fabergé eggs and real Ferrari dodgems. Gold-coated attendants would whisk visiting homeowners from one fun activity to another. From powerboating on the Serpentine to cabaret evenings where Celine and Elton play every night, there wouldn’t be a dull moment. It would be like Butlins. Only better. And, best of all, no local residents to complain about the noise levels.

What the global elite seem to cherish most is the peace and quiet that comes with an uninhabited neighbourhood. To really boost this sense of isolation, just you and the Bulgari store, the whole postcode could be operated on a timeshare, with families taking turns to brave the urban wilderness.

The undisputed Presidential Suite of the area is One Hyde Park, the £1bn Knightsbridge apartment block. As modestly described by its owners, the building is one “whose beauty, luxury and prestige have placed it in a class of its own on a global scale”.

It is also deserted. In spite of paying up to £6,000 per square foot to own a piece of the glass-clad ultra-residence, most of the owners have chosen to live elsewhere. Splashing £100m on an apartment only to leave it unoccupied for most of the year would seem an odd call to most of us. Perhaps most of us are behind the curve. Maybe actually living somewhere is hopelessly old-fashioned and really just a mark of low sophistication.

If it goes ahead – and from the robust rhetoric, it sounds very much like it will – the council house sell-off would be hugely positive for prices in the top postcodes. London estate agents could become the first in the world to be able to sell houses under the pitch of “Perfectly located in uninhabited city surroundings. Quiet neighbours. Parking not a problem.”

It would also do an immense amount of damage.

In selling off its property to the highest bidder, the government would allow wealth to self-ghettoise, stripping the most expensive neighbourhoods of the character and socio-economic diversity that has long made them the most attractive places to live.

That kind of cultural evisceration would leave a bitter taste for locals and the visiting super-rich alike.

Ed Hammond is the FT’s property correspondent

More columns at www.ft.com/perspective

ed.hammond@ft.com

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