It’s not about the London that we always perceive as the epicenter of numerous icons, the testament of its heydays of colonial rule; it’s another London, one embedded in secrecy, with anonymous accounts carrying huge sums of money, stored safely in elite condominiums, linked strongly to offshore banks, in its overseas territories (including its ex-colonies, say Hong Kong and Singapore), and one, in invincible pattern, which influences global banking industry worldwide in ways the public may never have imagined before.
There doesn’t simply exist one London, though; there is one where the Britons live, and the other one, a self-isolated microcosm where dictators, cronies, plutocrats, oligarchs, and tax evaders all store their vastly accumulated wealth here, at the same time when most of their home countries need the money the most.
Read the full article in Vanity Fair, released in April 2013 edition.
Starting in the 1960s, new buyers began to fire up the market: crises of the Greek monarchy brought a significant influx of Greeks, pockets of which endure today. Next came the first wave of Americans, a trickle of bankers lured by London’s unregulated Euro-markets, and West Coast buyers, often from Hollywood. “They swarmed in,” remembers veteran London real-estate agent Andrew Langton, of Aylesford International. “They turned Chester Square into Little L.A. and tidied up all these properties, at enormous expense, with American kitchens, bathrooms, and showers.”
The OPEC oil crisis, of the 1970s, lit the big fire under this market. Arab money surged into the so-called golden triangle of Knightsbridge, Belgravia, and nearby Mayfair, to buy high-end properties. Real-estate agents remember it as a tidal wave: “They came as a force,” says Hersham. “When they wanted to buy, there were no hysterics or reticence.” The fall of the Shah of Iran brought a surge of Iranian money, followed by buyers from the biggest African ex-colony, newly oil-rich Nigeria.
The market paused for breath in the 1980s, with Britain’s economy in the doldrums and as sagging world oil prices sapped wealthy foreign buyers’ demand. But Margaret Thatcher’s financial reforms, notably her “Big Bang” of Wild West financial deregulation, in 1986, caused the stream of bankers to turn into a river, then a deluge. “We would wait for those e-mails ending in ‘gs.com’ to come rolling in,” remembers Jeremy Davidson, a Belgravia-based property consultant. “Goldman [Sachs] partners, Morgan [Stanley] partners: they were the top of the market, and we had lots of them.”
The fall of the Soviet Union, in 1989, and the vast, corrupt post-Soviet privatizations, brought the biggest, most reckless wave of foreign buyers London had ever seen, with often questionable money sluicing in via the secretive British-linked stepping-stone tax havens of Cyprus and Gibraltar. “There is no real accountability of these guys coming in—the cops don’t really investigate them,” says Mark Hollingsworth, co-author of Londongrad, a 2009 book about the Russian invasion. “They see the capital as the most secure, fairest, most honest place to park their cash, and the judges here would never extradite them.”