Anchoring capital in place: The grounded impact of international wealth chains on housing markets in London

Abstract

Taking as our focus the city of London over the last decade, we use state-held records of house sales to consider the impact of competition for housing resources in the luxury property market. This data suggests that the use of offshore investment vehicles and the concealment of wealth from national tax agencies have become key mechanisms by which housing resources have been exploited by the wealthy and their capital deployed by agents of the rich. Using the concept of wealth chains, we consider these methods of capital accumulation as these extending flows of managed capital become ‘anchored’ within specific urban spaces, in this case the luxury housing market of inner West London. Our analysis of a selection of these chains shows that the prevailing political management of the property economy benefits those already winning the war of inequality while looking to augment their capital and shield it from tax and regulation. The ultra-wealthy, financial intermediaries and multinational corporations have created chains articulated across space, with the effect of undermining the value of dwellings as homes, and have replaced them with assets to be traded in pursuit of private and offshore wealth gains. The result is an urban context that favours already advantaged and powerful interests and enables the avoidance of tax obligations desperately needed at a time of austerity and intense housing need.

The uneven geography of real estate investment by Mainland Chinese state-owned and private enterprises in the U.S.: Local market conditions, migration, and ethnic networks

“…Second, in terms of pull factors attracting Chinese investment, since the global financial crisis, the role of housing as an asset has risen because of its heightened liquidity (Aalbers and Christophers, 2014; Fernandez and Aalbers, 2016; Madden and Marcuse, 2016; McKenzie and Atkinson, 2020). In an effort to restart sluggish economies and boost employment, numerous Western governments have relaxed foreign investment regulations and lowered the barriers to entry for overseas property buyers (Gaspar and Ampudia de Haro, 2019; Ley, 2017; Montezuma and McGarrigle, 2019; Rogers and Koh, 2017; Wong, 2017a).…”

Governing investors and developers: Analysing the role of risk allocation in urban development

“…At the same time, others have noted that the complexity of the private sector and the multiplicity of new forms of ‘investor’ require more academic attention (Özogul and Tasan-Kok, 2020). This is particularly true when looking at how wealth chains have extracted value from urban development in London (McKenzie and Atkinson, 2020). What remains under-addressed is how the actors within these extractive financialised processes are governed in different ways, depending on their particular corporate strategies and risk profiles.…”

Relational regulation and Chinese real estate investment in London: moving beyond the territorial trap

“…Drawing on the example of the relationships between US real estate companies and Russian property markets, they argue that geopolitics is not 'merely conditioning, but also conditioned by, real estate production and circulation'. Other studies of real estate production, especially of tall residential apartments in global cities, similarly highlight the importance of political economy explanations for the recent growth in international investments (Craggs, 2018;McKenzie & Atkinson, 2019), but with relatively little focus on the shifting nature of the political projects that shape investment systems in the countries from which the investment originates. The assumption is that high rates of value-extraction drive such investments, with less attention given to the geopolitical projects and cultural framings that underpin them.…”