Voluntary Ghost Town

04.02.13

How London Became a Gangster's Paradise

Sarah Lyall in the New York Times adds some color to the point I made in this weekend's column about Boris Berezovsky and Russian oligarchs. It's not some accident of climate or timezones that has made London the haven of choice for world's dubious money. It's deliberate state policy: in particular the policy that allows "non-domiciled" foreigners to live for extended periods in Britain while paying tax only on their British-source income, which is typically negligible. One of the (many) negative consequences of that policy is the shutting down of large areas of London as living neighborhoods.

An odd thing was happening, or rather not happening, as dusk fell the other day across Belgravia, home to some of the world’s most valuable real estate: almost no one seemed to be coming home. Perhaps half the windows were dark. It seems that practically the only people who can afford to live there don’t actually want to. Last year, the real estate firm Savills found that at least 37 percent of people buying property in the most expensive neighborhoods of central London did not intend them to be primary residences. … or single-family housing in the prime areas of London, British buyers spend an average of $2.25 million, Ms. Barnes said, while foreign buyers spend an average of $3.75 million, which increases to $7.5 million if they are from Russia or the Middle East.