Tag Archives: Chelsea

Lights-Out London

The foreign owners who have made London unaffordable for it’s citizens are leaving town

Racine had everything a west London restaurant could ask for: beaming reviews, great cooking and an enviable location opposite the V&A on the Brompton Road. For 12 years it served immaculate French standards to discerning diners and from the outside it looked like an institution to last a century.

But two weeks ago owner Henry Harris announced that Racine had moutarded its last lapin and would close. Qu’est-ce qui s’est passé?

“It was inevitable. The site had become unsustainable,” says Harris. “A rent renewal was the catalyst, but the main cause was the shrinking residential population in what should be a saturated area. My original clients, who were 50 or 60 when we opened, were that bit older. Some of them couldn’t afford to eat out as often after the recession, but others saw what their houses were worth and decided to realise that asset. They were replaced by non-doms who didn’t live there. In some apartment blocks 20% were unoccupied – one in five of my potential client base. It makes a big difference. In the block behind the restaurant it even became easier to park. You never expect to hear that in Knightsbridge.”

Racine is the latest victim of what some have called “lights-out London” where absentee owners push up property prices without contributing to the local economy. When Racine opened in 2002 the average price of a Knightsbridge home was £745,000; now it is £3.4m. There are an estimated 22,000 empty properties in London, partly a consequence of the city’s status as what the novelist William Gibson has called “the natural home of a sometimes slightly dodgy flight capital”. As Racine’s story shows, some businesses are feeling the effects.

Absenteeism as a problem is peculiar to the smudge of “super-prime” London around Harrods (although there are pockets elsewhere, such as Highgate). In a survey by the Empty Homes Agency last year, Kensington and Chelsea was found to have had a 40% annual increase in empty properties, the only area in southern England to show such an increase. Other boroughs on the list were mainly in poor parts of the north and north-west. The idea of the most expensive homes sitting empty is provocative in a city where any kind of property ownership is increasingly out of reach and politicians are moving to act.

Writing in the Independent, Tessa Jowell, who hopes to be Labour’s candidate in the capital’s mayoral contest next year, called empty homes a “scandal” and promised punitive taxes for their owners if she is elected. “Today in London hundreds of thousands of people are stuck in temporary accommodation, on social housing waiting lists, or years of saving short of buying their first home. At the same time the global super-rich buy London homes like they are gold bars, as assets to appreciate rather than homes in which to live … Absentee owners should live in the house they own or sell up – or face uncapped charges until they do. No dodges or clever schemes to get round that.”

The run on real estate has had indirect consequences, too. Some long-term residents, finding themselves in quiet areas, have themselves left in a kind of self-reinforcing loop. Businesses have been priced out of their offices, taking the lucrative expenses-lunch crowd with them.

“We had customers who worked in investment or banking firms nearby who would come in once a week for the old-school, ‘let’s enjoy the afternoon’ kind of lunch,” says Harris. “But they have moved – a short distance down the King’s Road you can get good offices for a fraction of the price per square foot. I know one architect who moved to Holborn – you wouldn’t have thought it would be cheaper near the City. The lunch trade was probably half what it was five years ago. A friend says it’s like a ghost town.”