A Russian multimillionaire last autumn flew out from Moscow in his private jet for a second look at a flat he was desperate to buy in the cream-columned Regency houses of London’s Eaton Square. When he touched down, he received bad news: the property had already been sold.

Such stories are not uncommon in the fiercely competitive market for the city’s most exclusive addresses, says Nathalie Hirst, head of London’s Prime Purchase, an estate agency ­dealing with high-end properties.

“Eaton Square is a world-renowned address and perceived to be the best of the best,” she says. “Its grand proportions and proximity to all the amenities of Knightsbridge mean that even in a market downturn, it has continued to attract buyers as diverse as British aristocracy, Russian oligarchs, American millionaires and Chinese billionaires.”

Despite a sluggish property market, prices in Eaton Square have remained strong in the wake of the financial crisis, says John Clark, residential investment director at Grosvenor, which, under the ownership of the Duke of Westminster, looks after the square. He points out “there is a very limited amount on the market for sale. So the supply is very low and the demand is high.”

According to Seamus Wylie, co-founder of Ayrton Wylie estate agency, Eaton Square is “the jewel in the crown of Belgravia. Captains of industry and hedge-fund guys live here.”

Concierges in metal-grey uniforms stand on the building steps. On a wintry morning, the streets are quiet, save for a man in his 60s ­emerging from his dark green Bentley, carrying a clarinet case, and an elderly woman in a peach tracksuit ­being escorted on a constitutional walk around the square by her housekeeper.

The square has always attracted the influential and wealthy. A New York Times article dated May 26 1937 reports the handover of power ­between the departing British prime minister and his successor as follows: “Van loads of the furniture of Prime Minister Stanley Baldwin and Neville Chamberlain, who will become Prime Minister ­Friday, will soon pass each other between 10 ­Downing Street and fashionable Eaton Square.”

Blue plaques dotted around the square show its grand ­heritage. One is dedicated to Edward Wood, the Earl of Halifax, who was viceroy of India during Gandhi’s civil-disobedience era and foreign secretary under Chamberlain; another shows George Peabody, the Victorian American banker and philanthropist who lived here, as did Joachim von Ribbentrop when he was the German ambassador to ­Britain before Adolf Hitler appointed him as foreign minister. Nor has this grand dwelling been a magnet just for politicians and business ­people. Actors Laurence Olivier and Vivien Leigh have lived here, as have Roger Moore and composer Andrew Lloyd Webber.

Current residents include Charles Saatchi, the art dealer, who occupies a house in the square with his wife, TV chef and food writer Nigella Lawson. Gerald Grosvenor, the sixth Duke of Westminster and the freeholder of most of the square, has a home here, though he spends most of his time in Eaton Hall, Cheshire. Recently, Joseph Lau, the chairman of Chinese Estates Holdings, a Chinese property development company, was reported to have bought a house with a pool, cinema and staff quarters for £33m ($50m).

And not every square in London can boast residents rubbing shoulders with ladies – Lady Jane Dawnay and Lady Bischoff (wife of Sir Win Bischoff, chairman of Lloyds), to name just two – at the annual general meeting of the garden committee.

The square is sought after partly due to its historically strategic ­location. When King George IV decided to make Buckingham Palace his home, the area that runs across King’s Road became an excellent base from which to court the king. In 1824, Richard Grosvenor, the second Marquess of Westminster who owned most of the land that is now ­Belgravia, Pimlico and Mayfair, commissioned master builder Thomas Cubitt to develop the square into large, terraced houses.

The appeal is obvious – grand houses close to Sloane Square, King’s Road and Chelsea. As one resident who prefers to remain anonymous says: “I love, love, love Eaton Square because of the location, quality of gardens, light security and porter service. I love the quality of the buildings, the thickness of the walls, the light coming into rooms and the lack of sounds. I love the width of the streets.”

It is mostly older people, having accumulated some wealth, who aspire to live here – though there are exceptions. Petra Ecclestone, the 21-year-old daughter of Formula One boss Bernie Ecclestone, recently moved into a four-bedroom house bought for £25m. She wanted somewhere close to the office from which she operates Form, her new fashion company. Her verdict? “I love living in Eaton Square. The different interior shops nearby are wonderful [and] inspire me to continually decorate my home.” The real selling point is that “it is great for my four dogs [and] it’s not too noisy, so I sleep in complete peace”.

But the square’s charms include more than just the ­architecture, the tennis courts and the quiet. Peter York, the social commentator and author of The ­Official Sloane Ranger Handbook, says: “London squares have always had a huge premium over streets. They look out on to green space, and their insider-ish, inward-looking quality makes them feel like an exclusive club.” But Oliver James, the psychologist and author of Affluenza and The Selfish ­Capitalist who grew up near Eaton Square, sees another side: “There used to be a lot of people living beyond their means. It was sad.”

One local, an entrepreneur in her late 20s who did not want to be identified, says: “You feel like you’re in a gang. If you meet someone [who turns out to be a neighbour], you feel they are one of us. It’s a feeling of safety. You know you can talk freely; there is a natural form of respect.”

This clubby feeling extends to the residents’ staff, she says. “Most of us here have drivers. They talk to each other and give each other tips, [or] call each other if they see a traffic warden coming.”

Even within the gang, there is a slight competition for location. Clark observes “the north side [designed by Cubitt] is slightly more sought after than the south [designed by William Howard Seth-Smith]. It’s slightly grander, a bit more stucco, bigger apartments.” However, to say there is a north-south divide would be overstating it.

While Eaton Square is an enclave for the super-rich, it is not, ­according to Anna Minton, author of Ground Control: Fear and ­Happiness in the Twenty-First-Century City, a “ghetto”. “For the past decade, London has become polarised between hot spots of wealth and cooler spots of poverty,” she says. “Eaton Square has retained its status as a prime property hot spot. But its open streets mean it is very different from the gated communities being built for some super-rich, like One Hyde Park, ­being developed by the Candy Brothers, which has flats with bulletproof ­windows and purified air.”

It proves, Minton says, “wealthy [areas] can have some neighbourly feel”. But there is a limit to this chumminess. As one resident remarks: “You don’t get people knocking on the door asking for a cup of sugar. Most ­people aren’t here full time.”

According to observers, the square has changed under the new Duke of Westminster, who has put Grosvenor on a much more commercial footing. Henrietta McCausland, director of the Grosvenor Stationery Com­pany, just around the corner from Eaton Square, has designed its residents’ dinner-party invitations for more than 20 years. She says: “Grosvenor has ­become much more active in ­promoting the square. It faces competition. It’s a tough market out there. They can’t just afford to sit back.”

York says: “It used to be more ­super-glamorous – famous actresses rubbed shoulders with the super-rich. The old duke would keep the rent down for people he liked in order to keep a good, glamorous mix. It used to be a big, rich pudding. Now it’s tougher and more commercial.”

Grosvenor owns nearly all the freeholds to the square’s 380-plus flats (a few are owned outright by independent freeholders). It operates an unusual system whereby 60 per cent of the flats have leases of below 21 years, which means it is exempt from normal leaseholder rights.

Clark points out: “When such a lease comes to an end, then technically they have to leave and it [the property] is worth nothing to them.” This arrangement fills a gap, he says, between renting and paying a lot of money to own a lease for a very long time. It’s a “middle-range product, like having a fixed rent but with the security of ownership. Some people might want an apartment in Eaton Square for 20 years during their career. Or it suits their tax, or it might help with inheritance and estate planning.” The risk is that residents could sink all their capital into the property and have nowhere to live at the end of the lease.

Many properties in the square are owned by super-wealthy ­foreigners, keen for a London base to do business alongside their ­properties in New York and Hong Kong. A few are also owned by banks for use by senior ­employees. Moreover, many of the ­British owners have a property in the countryside. Therefore the ­character of the square is more transient than it used to be. Oliver James ­believes it has affected the square’s character for the worse, adding: “Now it is a fairly anonymous area.”

Foreign wealth is, of course, nothing new. In Henry James’s 1904 novel The Golden Bowl, Eaton Square is the residence of Adam Verver, a fantastically wealthy American who has made his millions through skyscrapers and elevators. According to Anna Despotopoulou, ­assistant professor in the faculty of English studies at the University of Athens, “Mr Verver conquers Britain by supplying himself and his family with socially significant property. His impulse to conquer the Old World is described in imperialist terms as he is ­likened to Alexander the Great and Hernando Cortés, the conqueror of Mexico.” The symbolism of his address is important. As Despotopoulou says, “his immeasurable financial resources, manifested in the expensive property that he buys, render him financially omnipotent”.

In the author’s mind, prestigious ­addresses like Eaton Square were ­vulnerable to be taken over by new, ­foreign money – at that time the US. Yet, there is a difference between then and now, says Peter York.

“In the old days, foreigners would come because they aspired to be part of a glamorous London. Now it is just one property among others they own. They don’t have the same public-spiritedness as people who make it their primary residence.”

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