The Telegraph’s Week-Long Anxiety Attack Over the Price of Mansions
Prime Central London isn’t Britain. It’s an asset bubble with valet parking, and the Telegraph can’t seem to tell the difference.
This is Bearly Politics - an independent publication about politics, power, and the fine art of collective overreaction. I am
and I’m reporting live from a city which is apparently in crisis because a few mansions won’t sell and a billionaire’s hairdresser is upset.Living in London, I quite often find myself in the trap of thinking it’s the centre of the world - never mind the UK. It is a city that I love very deeply and in which I have lived very happily for just about a decade now, and I do suspect that anyone who lives in this city, for the most part, often fall into the same trap.
This trap, however, pales in comparison to the current week-long anxiety attack that The Telegraph has been having over that issue that has all of us constantly worrying - the ceaseless exodus of millionaires and billionaires out of the capital’s most gilded postcodes and the (supposedly) doom-laden ripple effects that follow in their Louis Vuitton1 wheely bags’ wake.
If you had to take the whole series at face value, which, unfortunately many people may well do, you would not be wrong to think that when a £75m Marylebone mansion sits on Right-Move a little longer on the market than usual, that the North Sea will stop pumping, the NHS will shut on Tuesdays and the last person to leave Montpellier Square should kindly turn off the chandelier2.
All of it makes for absolutely fantastic copy, but in terms of actual economic impact? It’s a bit lacking.
The basic problem with the reporting we’ve seen from the Telegraph this week is its focus - Prime Central London, places like Knightsbridge, Belgravia, Mayfair and the glossier bits of Marylebone. Regardless of just how keen they want to create a full economic picture out of one of the most exclusive parts of the capital, it just doesn’t behave like the rest of London, and most definitely not like the rest of the country.
It behaves like an asset class3.
The buyers of properties within this glitzy pocket of the capital are global, the capital is footloose and the market it finds itself in is so thin you can sometimes count the number of serious bidders on the fingers of one fabulously manicured hands.
When you decide to treat this thin, globally exposed niche as a proxy for national welfare you’re not even comparing apples to apples, you’re comparing apples to Faberge eggs. It tells you something, but mostly it’s a story about a very specific group of people with very specific taste.
When you look at this in terms of segmentation, it starts to make a bit more sense - when London Estate Agents talk about “Prime Central London”, they’re discussing a micro-market with a completely different oxygen supply than what 99.9% of the country would be looking at in terms of property4, and the method of sale is not a mortgage from NatWest, it’s cold hard cash.
The buyers also tend to be extremely mobile to begin with - their passports reading like a bit of a world tour of wherever the latest financial crisis, war or tax break happens to be. They’re not people “leaving the UK” in the way the the Telegraph frames the story - they’re people who are reallocating capital, not fleeing a disaster zone5.
The other point that I cannot stress enough is that the areas in question aren’t really London at all - it’s a glossy island that sits within it which has traditionally acted like a bit of a fiscal duty-free zone where everything costs about ten times as much as it should and the lights of the houses that are there, are mostly turned off. Nothing that happens in this enclave tells you anything about how Croydon is doing, or how families in Bristol, Cardiff, Belfast or Aberdeen are managing their mortgages. It tells you, very specifically, how a handful of buyers who could just as easily be in Monaco, Dubai or Singapore feel about the next safe place to park their money to allow it to create more money.
And when interest rates go up - which if you’ve noticed, they have, significantly over the past few years - that changes the maths for everyone, whether you have a mortgage or not, and it doesn’t need a Nobel Prize in economics to understand that. Money, since the pandemic, has become more expensive - so if you’re sitting on £10m and debating buying a third townhouse (that will sit empty for nine months of the year) or invest it in something that actually earns interest, that logic is going to tilt. We’re not seeing a “war on wealth”, as the Telegraph is darkly muttering to itself, we’re seeing an end of the free-money era6.
There’s also consideration that needs to be given to the role of geopolitics - for the past decade or so, London has been the global laundry for capital that’s not completely stain free. Russian Oligarchs, Royals from the Gulf and Chinese Billionaires (among others) all used to love coming to London because it was stupidly easy to buy a mansion through a shell company and then vanish into safe anonymity.
But the rules have changed - beneficial ownership registers exist and it’s become just a bit harder to walk into Belgravia with a suitcase full of cash, buy a mansion and walk bout without ever explaining where that money came from. There is, very curiously, no mention of this in any of the “war on wealth” Telegraph articles anywhere because, as is expected, blaming Labour is far more poetic than acknowledging that we’ve made it harder for global interests to stash their cash in properties in this country.
The whole “lights-out London” imagery is also a bit… stupid.
It completely overlooks the fact that those empty windows in Knightsbridge are not a new phenomenon - they’ve been dark for years. Many of these properties were never built to be lived in - they were built for wealth storage, not as family homes. If there are now a few that are struggling to get off the market, or, god forbid, fetching slightly less than the price of a small NHS trust7, that’s not an economic armageddon awaiting us all - it’s what happens when a hyper-inflated asset class deflates by single percentage points.
The other point that very rarely makes it into the Telegraph’s lamentations about lights being off is that those dark windows don’t really contribute that much to the economy even when they are occupied. A home that’s lived in for three weeks of the year by a tax exile isn’t exactly keeping the local economy running with their largesse8.
The dry cleaner on the corner doesn’t get regular business, the corner cafe doesn’t sell their daily flat white and I can guarantee you that the off-licence does not get a late night visit from them because someone in the house is in the mood for a Magnum Ice Cream and a few Haribo9. The GP surgery, the school, the bus route - all the bits and pieces that make a neighbourhood an actual place for real human beings rather than the backdrop to a week-long hissy fit by a staff writer at the Telegraph don’t benefit from residents who are never there to switch the lights on.
There’s also the melodrama related to their reporting on retail in these areas - yes, Mayfair’s vacancy rate has ticked up over the years, that’s visible to anyone who’s taken the time to count the “To Let” signs between Bond Street and Berkely Square. The issue here being that the West End as a whole has been slowly crawling back from the crater caused by a global pandemic, tourism patterns that have been reshuffling and hybrid working meaning fewer weekday wallets drifting past a glassy flagship store at 11:30 on a Tuesday morning.
Some of it will, of course, be about the well-rehearsed battle over tax-free shopping and whether that policy even makes a difference at the margin, and some of it is simply the new equilibrium of footfall and online spend. A big part of it is also down to a certain B-word, but there is a better chance of me falling pregnant than the Telegraph admitting impact that this may have had.
My personal favourite in the saga of articles also relies heavily on hairdressers to the stars, concierge firms and estate agents as being magical economic oracles.
They’re all charming, very heartfelt stories, but you’d be forgiven for thinking that according to the Telegraph the national accounts had been outsourced to people who sell £7k chairs and charge £190 for a blowdry.
Anecdotes are delicious, and they work incredibly well on our emotions, but they’re not denominated in billions. A stylist who gets the goss from their clients about “quality of life” and “crime” tells us something about rich people’s moods, but it doesn’t tell us whether the overall retail sales are down in real terms, whether non-dom reforms have lowered total receipts or whether the average vacancy rate in central London is truly exceptional when compared to other Euro luxury districts facing the same post-COVID, high-rate headwinds.
The thing that the coverage from the Telegraph mostly tells us isn’t economic peril - it’s emotional fragility. The UK’s right-wing press has spent decades attempting to convince us all that the fortunes of a few thousand ultra-wealthy Londoners translate directly into the prosperity of the nation at large, and so it leads to a reflexive panic on their behalf when those fortunes even so much as give a wobble.
But for the 99.9% of us living in this country, the market they’re describing may just as well be on another planet - most of us aren’t checking the price movements or availability of Montpellier Square townhouses, we’re checking whether we’ll be able to still afford to heat this winter after our mortgage comes off its low rate and onto the Truss Iceberg Special10.
If I’m being very honest, all of this coverage about these millionaires and their “departure” really just translate into extended holidays with tax benefits. Many of the so-called exiles will retain ownership of their London homes, their investments, their club memberships and even their hairdressers - they’ll just be doing it in a place where they can pay slightly less tax, which in my mind isn’t so much exile as it is optimisation. The Telegraph frames this as a tragedy for the nation, from which may not recover, but in reality it’s literally just the wealthy doing what they have always done - moving to where they can be least inconvenienced.
Which, to a large extent, is what gets lost in all this pearl-clutching and faint-sofa falling - no one is saying the wealthy shouldn’t exist, or even that success should be punished. What’s being said, very quietly under all the noise, is that the richest people in one of the richest cities in one of the wealthiest countries on earth should maybe consider contributing proportionally to the society that they claim to love, and if a few of them decide that that’s simply too much for them to bear, then fine.
London will survive - it always has.
This city, no matter what people with very large wallets may tell you, isn’t powered by oligarchs or absentee landlords - it’s powered by the millions of people who actually live their lives here, who take the tube, shop at the big Tesco, work in hospitals and schools and small businesses. They’re the ones that are keeping the lights on, and those lights are still very much shining.
This post was brought to you live on location in London, by a perfectly ordinary Londoner who still takes the Tube, pays rent, and occasionally wonders how on earth we became emotionally dependent on the mood swings of millionaires.
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Or send it to someone else keeping the lights on while the Telegraph mourns the ones that aren’t.
Louis Vuitton of course being the national flag of performative suffering.
Your gentle reminder that the average chandelier in Mayfair has more lightbulbs than a GP surgery has staff members.
Translation: not a place where anyone actually lives but a physical manifestation of a high-interest bearing investment portfolio.
Most of us are honestly just looking for a place with a small outside space and a flat big enough to keep a cat reasonably happy.
They will survive this - evac flights to Monaco and Abu Dhabi remain as of the time of writing uncongested.
A tragic loss, of course, to those whose net worth was dependent on quantitive easing and good PR.
Though to be perfectly honest, one will come with actual working plumbing, and it’s not the one that exists to save people’s lives.
Largesse defined in this case as tipping the doorman once a quarter.
This happens far more often in my house than can be considered reasonable.
Served with a side of regret and a garnish of crippling anxiety when you realise your mortgage will almost double in exactly 62 weeks.
Thank you for reading the Torygraph ob our behalf - means that we don't have to!
I take it that the newspaper in question doesn't mention that it's owners fall into the category of not paying UK tax either?
All those tower blocks on the South Bank, built under Johnson, most/many as investment properties. Get the train out of Waterloo on a winters evening and check how few have their lights on.