“Central London is different” is a phrase I hear often from estate agents and other property professionals, and with good reason.
Its prices are higher than elsewhere in the UK, its stock arguably less plentiful, the mix of ‘good’ and ‘bad’ often closer together than in other cities, and its ability to make headlines is unmatched - about everything from the Olympics to this weeks’ release of Capital, a book using Central London as a lightning rod for a critique of the current financial crisis.
But recently people have cited two other reasons why Central London is different, and perhaps not in a good way.
Firstly, a few estate agents have said it is now clear that the very steep increase in overseas ownership of Central London property in recent years has started to produce an unanticipated effect - many of the homes bought in, say, the period from 2000 to 2005 are not returning to the market now, seven to 12 years later, as they would have in the past.
That is because those properties are being kept or sold off-market to other overseas purchasers (so not involving UK buying or estate agents) or sometimes are being passed within the same family. Either way, they do not add to the stock of Central London homes on sale, contributing to a shortage and - of course - effectively pushing up prices further.
Secondly, one buying agent has suggested that the increased ownership of Central London residential property by the uber-rich means those homes are empty for much of the year. This is less surprising - after all, those wealthy owners have many homes elsewhere in the world and do not need to rent out their London properties to pay the bills.
As a result of this long-term ‘emptiness’ - well documented in cases like One Hyde Park, where the media have spotted that relatively few apartments ever have lights on after dark - there is now a fear that the infrastructure of certain prime locations will wither.
The local Starbucks and some restaurants may still do good business from those working in the area, but during the evenings and at weekends, might parts of Mayfair and Knightsbridge become ghost streets, like some of those in the City of London?
In a way, we have been here before. Go to a village like Port Isaac in Cornwall, where for eight months of the year it is thriving thanks to second home owners but - over winter - it turns into a bit of a ghost village. Is Central London going to suffer a crudely similar fate?
This may be because property in some select parts of the capital has ceased to be about living in a home and more about owning an asset. Can anything be done to stop the rot? Or do the short term gains of commission on sales today, mean that no one is worrying about what the trend will do to Central London tomorrow?
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