The Super-rich in Our City, by Jane McChrystal.

 

London has become home to more members of the global super-rich than any other city in the world.  Londoners might catch occasional glimpses of their presence when a super yacht moors by HMS Belfast on the Thames or another planning dispute over a basement excavation breaks out in the news.

Two recent academic reports identify where the super-rich like to live in London (1) and describe their impact on the neighbourhoods they’ve chosen (2).  They present some valuable insights into the economic status and social characteristics of London’s super-rich and why they find the city so attractive, drawing on data gathered by the marketing companies MOSAIC and ACORN.

The economic context for the reports is provided by Thomas Piketty’s book, Capital in the 21st Century (3) where he argued that an anomalous economic condition in the history of capitalism occurred between 1930 and the 1970’s, when some of the wealth concentrated previously in the hands of the very few, became more evenly distributed and the enormous gap between the richest and poorest began to narrow.  However since the early 1980’s increases in wages and salaries have been consistently outstripped by the profits derived from investment in capital assets, paving the way for levels of inequality not seen since before the First World War.

The World Wealth Report (4) revealed that the number of high net worth individuals* has grown from 8.6 million to 14.6 million between 2008 and 2014, an increase of seventy percent.

Welcome to Pikettyville (1) informs us that seventy sterling billionaires now reside in London, more than Moscow with 48, New York with 43 and Hong Kong with 34.

What makes London so appealing to the super-rich? Direct experience of world conflict is rare and the stable political and social climate makes life here very safe.  Assets can be hidden from tax-gatherers in the British Territories Overseas and dependencies such as the Cayman Islands and the British Virgin Islands.  There is very little political will to pursue the super-rich for taxes and, if there were, Her Majesty’s Revenue and Customs office is over-stretched and ill-equipped for the task.

Areas such as Kensington, Knightsbridge, Mayfair, Notting Hill, Belgravia, Chelsea, Bayswater, Hampstead and Highgate have long provided a refuge in London for the very wealthy, drawn by the handsome porticoed houses which line many of their streets.  The super-rich favour them too, but for different reasons.

Life in an Alpha Territory (2) documents the effect of the global super-rich residents in Highgate on their neighbours and illustrates the contrast between the old and new rich, in particular their view of themselves in relation to the wider society and the community they inhabit, through the history of a great house, Witanhurst.

Witanhurst was built in 11 acres on the Hampstead Ridge and is now the second-largest residential property in London after Buckingham Palace.  It was built by the industrialist, Sir Arthur Crosfield, using the profits of the family business which was founded on manufacturing soap and developed through pioneering large-scale, industrial, chemical processes.

Its fortunes have varied since its completion in 1920 and it was sold to an unknown buyer in 2009 in need of complete restoration.  The scale of work needed to carry out the programme of renovations caused heavy traffic and constant disruption in the Highgate area, but when locals wanted to protest, they couldn’t find Witanhurst’s owner.  In 2015 an American journalist, Ed Caesar, revealed in the New Yorker Magazine that he is Andrey Guryev, the majority owner of AgroPhos a Russian fertiliser company worth £2.6 billion, who had registered it with a holding company based in the Virgin Islands, where it remained hidden for six years.

The difficulty in tracing Witanhurst’s ownership shows how zealously the super-rich guard their privacy.  Concealing financial assets is just one possible reason for their diligence.  Living secretly in a huge house, close to a community but isolated from it by large grounds, makes it easier to insulate its residents from the risk of robbery and attack.

A property like Witanhurst has the added advantage of providing its owner with the space to construct the underground car parks, car lifts, cinemas, media centres and swimming pools which mark the peak of super-rich aspiration.

Witanhurst’s creator differed from Guryev in that he built his house to signal his wealth and power to everyone including his industrial rivals, the Levers who were erecting a pile of their own, Inverforth House, on the other side of Hampstead Heath.  He didn’t seek to isolate himself from society and, indeed, served as Liberal MP for Warrington where his factories were located.  Once established in Highgate he spent a number of years campaigning to save the Kenwood Estate on Hampstead Heath.

Today’s global super-rich don’t share his taste for participation in civic life.  They bring their own servants and security with them and run their domestic and business affairs through a family office.  They mix mainly with other wealthy individuals who often divide their time between London, Monaco and the Caribbean.  They might lavish wealth on a prestigious property, but with no stake in the community, London functions as a stopover on an international circuit for the super-rich.

The lives of the super-rich are unlikely to be affected by the housing crisis in London or cuts in benefits and the health service, which blight many people’s lives here, but there’s something ugly about the idea of the world’s most privileged individuals seeking peace and security in this city without making a fair contribution to the welfare of those who work to maintain it.

*The UK definition of a HNWI is anyone who has more than £650,000 worth of liquid assets, a figure which must exclude the value of their home.

  1. Welcome to “Pikettyville”? The Geodemographics of the “Super-rich” in Roger Burrows, Richard Webber and Rowland Atkinson. Sociological review, 2016. Richard Webber kindly sent me a prepublication copy of this paper.
  2. Life in an Alpha territory: Discontinuity and Conflict in an Elite London “Village”. Richard Webber and Roger Burrows. In Urban Studies, 2016, volume 53, issue 15, pp3139-3154.  http://journals.sagepub.com/doi/pdf/10.1177/0042098015612983
  3. World Wealth Report, 2013. https://worldwealthreport.com/
  4. Capital in the 21st Century, 2014. Thomas Piketty.  Belknap

This article has not been referenced in accordance with academic standards, but reasonable efforts have been made to ensure that readers will be able to trace information and statistics to their original sources, if they wish.