The 50-storey skyscraper Aykon will be “a global symbol of opulence … the ultimate in luxury, the ultimate in Versace,” according to its promoters.
Outside the launch event for the building in the marble clad rooms of the five-star Dorchester hotel, a Mercedes sporting the number plate TOF5S sat next to a gold-plated Range Rover.
Buyers were presented with a goody-bag including a Versace designed bowl with a gold-coloured Medusa head. The price list was being reprinted during the event because offers were going up so fast.
Across London campaigners are fighting to prevent evictions from social housing. And the scramble for overpriced rental flats has seen people living in sheds—sometimes in gardens, sometimes in the front room of a shared house.
Developer Ziad El Chaar said Aykon will have “an equal distribution across all the social categories”.
He added that the development will offer “a more affordable option for people who want to live very close to central London”.
Studio flats started at £715,000. There are 22,000 households on the housing waiting list in the borough of Lambeth and 255,000 across London. It is unlikely Aykon will be their home
This is just one building on “Nine Elms on the South Bank”, which stretches along the Thames from Vauxhall to Battersea power station.
The skyline is crammed with cranes. Show flats, offers of car lifts and exclusive views compete with stock photography of beautiful people walking along leafy boulevards.
It is apparently “Dubai on the Thames”—which the developers means as a compliment—and according to London mayor Boris Johnson is “the greatest transformational story in the world’s greatest city”.
Over £15 billion of investment is pouring into the Nine Elms area.
Two new Tube stations are being built to service the district. There is the planned arrival of the US Embassy in 2017, which will be in a glass cube on the riverside.
Next to it will be Embassy Gardens, which may feature a floating “sky pool”—a bridge suspended between two buildings.
The purpose is not merely to make it easier for well-heeled residents—the only residents—to swim from one rooftop deck to another. It allows them to be seen while doing so. The sky pool secures an ultra-elite experience while casually insulting everyone else.
Then there is the ever-growing ugly and empty St George Wharf, twice voted worst building in the world by the Architects’ Journal’s polls of architects.
The Vauxhall Tower, which John Prescott pushed through while deputy prime minister against planners and civil servants, is also already built. Under the Tories the 50-storey folly has been expanded to a policy.
Instead of recognising it as a high rise white elephant, it was turned to a strategy. The area was declared perfect for a cluster of speculative high rises.
The only serious objections have come from competing developers pushing to make sure their tower has enough room. Meanwhile the piecemeal pushing of ordinary people out of the area has become virtually total.
The gay clubs and bars in Vauxhall are feeling the pinch. Some have gone, more won’t make the transition to being part of the new Vauxhall.
Demolition is done in stages to try to reduce the number of simultaneous “decants”—a euphemism for evictions.
On the riverside empty expensive sushi and steak restaurants compete for business lunch groups who haven’t arrived yet. Work has begun on One Nine Elms—which also boasts a cinema, gym, and roof terrace.
Two towers of 60 and 45 storeys linked by a walkway will house 491 flats and a five-star hotel.
There will be a “linear park” parallel to the river—that’s planner speak for narrow. That means it doesn’t take up too much space. At the heart of the development is Battersea power station, converted to flats. Its iconic towers are to be replaced with replicas. Facade is everything.
But how is the money made?
The flats aren’t homes but investment units to be sold and sold again, perhaps never inhabited. The blocks are silos of luxury safe-deposit boxes.
The penthouse flat in Vauxhall Tower sold for £48 million. But look at the tower on any evening you’ll see most of the flats are in darkness.
Flats are sold “off plan”—unbuilt—and are then put back on the market at higher prices.
Unbuilt studio flats in the power station were sold for close to £1 million. They were back on the market for £1.4 million in a month.
Some developers guarantee to buy back a flat if it isn’t worth 115 percent of what is was sold off plan for.
The initial buyers don’t pay the full purchase price, just a deposit of up to 20 percent. The new buyers then take over next-stage payments, usually another 20 percent.
For all the talk of innovative design, in reality it doesn’t really matter what’s inside.
So for One Nine Elms, agents Hamptons International reckon that buyers need only put down a 5 percent deposit now—around £50,000 on a one-bed flat—and another 20 percent over the next 18 months. Yet they could then walk away with a profit projected at £230,000 on £1 million.
So speculation is driving this. Investors looking for a fast buck have expanded a bubble.
Some of this is about hiding dirty money. At least 36,000 London
properties are owned by offshore companies in jurisdictions which protect the identity of their owners—including up to one in ten properties in the borough of Westminster.
There tens of thousands more that are owned by more open—but still tax avoiding—offshore firms. But there are clouds on the horizon. Plush estate agents are worried about “flat flipping”.
There are numerous developments yet to come up for sale. But they will come on the market as the ten to 20 percent deposit owners sell on their not-yet-built property as well.
There’s a risk that, with everyone selling, there’ll be no one left to buy.
Aristocratic land owners and British land banking corporations made money, and the developers have made a profit. The speculators have too.
But there was a 10 percent drop in the value of luxury homes in Battersea in the year to June.
There has been a flight of Russian, Chinese and Malaysian investment from the London property market in recent months.
Economic crisis may mean that the bubble bursts before the paint is dry on some of the designer interiors. Even if it doesn’t, a massive hollow monument to speculation disguised as homes is being built behind gates.
Numerous councils are replacing funding for cuts by doing deals with developers that aren’t even providing the paltry social housing they promise.
The devil is in the detail. The detail is Section 106 (S106) of the Town and Country Planning Act 1990.
This makes it in local authorities’ interests to allow schemes to escalate in the hope of getting some crumbs of the developers’ profits.
Under S106 agreements, firms make a financial contribution to councils. This is intended to be spent on offsetting the effects of the scheme on the local area.
In practice S106 has become a way of filling public services’ funding gaps left by cuts.
The idea is the bigger the scheme the bigger the crumb. The situation that has developed is not far from legalised bribery—or extortion.
Cramming in extra units and a few extra storeys can be justified if it means a handful of trees get planted on the street. In this world a poor door entrance is a victory.
So the Aykon tower developers are erecting a separate, rather more squat, building for some housing association tenants.
Councils have varying percentages of what they claim is a social housing requirement.
Importantly, “social” and “affordable” don’t mean ordinary people can afford them.
Usually Wandsworth council asks that 33 percent of a new development is affordable. But in Wandsworth Council-approved Nine Elms, 600 out of 10,000 dwellings will be let for “social rent”.
Of the 3,444 new homes at Battersea power station 560, or 16 percent, will be affordable. But that includes “intermediate properties”, which are set at 80 percent of market rates.
At Keybridge House in Vauxhall, where BT is demolishing a telephone exchange to build five high-rise blocks, the 419 new flats include just 19 “affordable” homes.
At 4.5 percent of the total, this is far short of Lambeth council’s affordable target of 40 percent.
The system has spawned an industry of S106 avoidance. Consultancies have been set up specifically to help developers get out of paying for affordable housing at all.
S106 Management is one that offers “to establish the profitability of your project and thereby reveal unviable Section 106 obligations”.
It boasts of planning permissions achieved “without any contribution towards affordable housing” at all.
S106 agreements are renegotiable, allowing review and appeal of all existing obligations.
This simply makes it easier for developers to wriggle out of their promises.
Developers put in a plan with a commitment to affordable housing and building local services.
Consultation documents and nice graphics are produced. Planning permission is granted. Then the developers renegotiate.
Viability is the key. And unviable means profit rates of less than 20 percent. Planning applications include a viability appraisal.
These explain in hugely complex detail why only the developers proposed version of a development is possible.
And how previously agreed amenities—shops, affordable housing, trees—are incompatible with the building being viable.
The calculations behind what is viable are usually undisclosed for reasons of commercial confidentiality—including to the planning officers.
Of course rather than fight a losing battle over crumbs we could build public housing to house people rather than make money for speculators.
Class struggle toppled apartheid