Karen’s Article for the St John’s Wood Society Autumn Newsletter

Posted: 08/11/13

The rise and rise of ‘Super Prime' - and what is may mean for our city.

The St John's Wood Society deserves all the credit it gets for its constant efforts to protect the quality of life of this unique and lovely corner of London. It is a corner rich in history and culture. A corner about which many stories have been told- some of them even fit for re-telling in decent company. But central London is changing fast and new pressures are emerging which challenge all of us who want to live in a dynamic but socially and culturally diverse city which maintains a sense of community across its many ‘villages'.

The rapid growth of the ‘super prime' housing market- usually defined as properties worth £10m or more- confirms what we already knew, that London is one of the handful of global cities deemed safe and attractive for international investors., and which is therefore sucking in massive investment in property. According to the recent Savills report over two thirds of buyers at the top end of the London property market came from overseas in the past two years.

Now, London has always been an international city (at pretty well every level), and this international appeal, together with the generally successful integration of diverse communities, is one reason for London's success. Cities don't thrive economically or in other ways if they are closed off to outsiders or don't appeal to them. Many Britons own homes abroad, too. So this is not an argument for insularity.

But that doesn't mean we should not be asking some hard questions about the public policy implications of what is happening in the heart of London.

Such as, what is the impact on a neighbourhood when so many houses are owned by people for whom they are not home, and who indeed may rarely even visit?

To take one specific example, helped by the St John's Wood Society and other Westminster amenity societies, I have been campaigning on the issue of excessive and disruptive basement conversions. A common theme frequently emerges from neighbour's complaints- the owners of so many of the properties where these mega-basement excavations are going on are no merely absent but hidden behind foreign companies, unaccountable and uncontactable.

Should we be concerned that such a high proportion of new-build, high value, London homes are being marketed abroad, off-plan? That they are not even always available to home buyers?Isn't it making the situation worse that the Council is permitting so many high value developers to avoid their duties to provide even a small proportion of affordable homes on the site of these developments? Despite the huge housing pressure across London, driving up homelessness amongst the lowers income groups, which itself cost Westminster over £40 million last year, just 139 new ‘affordable' homes have been built since 2010, and only 85 of them were for council rent.

Westminster already has the highest proportion of any council in the country for households renting privately. A healthy private rented sector is a good thing, but it is characterised by very high turnover, and this is turn is associated with a low level of connection to the area. The new housing market is intensifying this process, with the risk that very high transience undermines hard-won efforts to build a sense of community, and reduces pressure to deliver effective local services.

And finally, can it be right that the residents of super-prime homes like the £20m plus properties at 1, Knightsbridge pay the same property tax (in the shape of Council Tax) as the owner of a home originally valued at just £320,000? This seems to raise some serious questions about fairness.

However this debate unfolds (and I welcome the views of St John's Wood Society members), I want to ensure that the interests of long-standing residents are protected. Change is inevitable- London never stands still and that has many positives as well as some downsides-but we do not want to follow the pattern emerging elsewhere, where the centre is hollowed out and the needs and interests of established communities are submerged beneath the tide of global super-wealth.