Overseas investment into London: Imprint, impact and pied-à-terre urbanism

Abstract

This paper focuses on the spatial imprint and social impacts of the emerging geographies of concentrated overseas investment into London's high-end real estate market, particularly the boroughs of Westminster and Kensington and Chelsea. Framed by literatures on the 1% and the super-rich, and based on a mixed methodological approach of qualitative interviews with intermediaries and a quantitative mapping of overseas investors using 2011 census data, the results speak to the pervasive nature of ''safe-haven'' seeking in London real estate and its attendant transnational provenance set within a laissez-faire regulatory framework. In so doing, it makes an important contribution to the geographies of the super-rich, the class geographies of London, and the broader sense that overseas investors are producing what we call ''pied-a`-terre'' urbanism which builds on a conventional gentrification framework (exclusionary displacement and a more affluent incoming group) but also exceeds it in several ways, leading to an increasingly socially attenuated landscape. This exceeding relates to: a different kind of rent gap, in that it is not speculative but safe-haven seeking, a guaranteed return on investment, and occurs without previous disinvestment; the agents are not traditional gentrifiers; the transnational nature of the process, with no attachment to particular places like in the traditional gentrification model; and a process focused on superprime areas and completely independent of the existing gentrification narrative in London. KeywordsSuper-rich, London, overseas investment, the 1%, pied-a`-terre urbanism

Financing urban development, three business models: Johannesburg, Shanghai and London

“…It is here, then, that care must be taken not to ascribe sometimes shocking contemporary outcomes in the built environment to broad-brush processes such as “neoliberalisation”, “gentrification”, “financialisation” or “austerity”, or to place the blame on iconic private sector actors, such as the greedy global developer ( Colenutt, 2020 ; Hatherley, 2014 ), or the absent foreign owner ( Fernandez et al, 2016 ; De Verteuil & Manley, 2017 ). Rather, a complex mix of strongly path-dependent practices involving the territorialization and co-ordination of numerous actors and political and financial interests to enable development, on a case by case basis, lies at the base of the politics of financing urban development.…”

“…Returns are collectivised at a city-wide scale and goals can be set for a development which are not simply about maximising returns from lucrative ‘land business’ or highest value property development. This limits the kinds of speculative and reduced built environment outcomes often ascribed to neoliberal or financialised forms of development ( De Verteuil & Manley, 2017 ; Guironnet, Attuyer, & Halbert, 2016 ; Halbert et al, 2016 ). Blending finance across territories and time can also be beneficial, if a development can draw on income and reserves from earlier investments or benefit from investments in a different location.…”

Airbnb, buy-to-let investment and tourism-driven displacement: A case study in Lisbon

“…In this respect, two main arguments are developed: first, we suggest that Airbnb acts as an instrument that contributes to the financialization of housing. By the financialization of housing, we refer particularly to the housing sector's ability to absorb surplus capital (Aalbers and Christophers, 2014;DeVerteuil and Manley, 2017;Fernandez et al, 2016). In this regard, Airbnb plays an important role in a process described by others (August and Walks, 2018;Beswick et al, 2016;Fields and Uffer, 2016;Janoschka et al, 2019;Paccoud, 2017;Wijburg et al, 2018), whereby rental housing has become a new financial asset in the wake of the 2008 economic crisis.…”

One and the Same? A Systematic Literature Review of Residential Property Investor Types

“…Savini and Aalbers (2016), for example, differentiate between local, national, and international investors. Hoang (2018) discusses local, regional, and global investors, while DeVerteuil and Manley (2017) contrast local with overseas investors. The definition of the “local” scale, in this respect, differs from publication to publication: in some articles, it designates municipal boundaries, while in others, it refers to domestic investors operating within a particular country (Wu and Tidwell 2015; Korniotis and Kumar 2013).…”

“…These effects are predominantly evaluated as negative, such as the creation of exclusionary housing markets (Cook 2010). More broadly, Fernandez, Hofman, and Aalbers (2016, 2455) argue that “the influx of foreign investors transforms the culture of places and the sense of ownership of the city.” DeVerteuil and Manley (2017, 1310) even talk about a “residential colonization by overseas investors.” Thereby, they consider the GFC as a major event that has accelerated global foreign capital looking for guaranteed and safe returns on investment in residential property, instead of being speculative in super-prime areas of global cities such as London (DeVerteuil and Manley 2017). Others have found that foreign capital often finds its way to cities on the basis of a home bias abroad : foreign investors tend to target a “destination city with a high concentration of source-country-origin residents” (Badarinza and Ramadorai 2018, 533).…”