On August 7th 2007, the world watched helplessly as the bubble surrounding speculative US sub-prime mortgage deals spectacularly burst, bringing down a global superpower along with the hangers on who had for so long feasted from a banquet that had never been laid.
Most analysts are in agreement that it has been the worst financial crisis since the Great Depression of the 1930s, with the threat of total collapse for international financial institutions begetting government bailouts that ran into their trillions. Property markets took the biggest hit, resulting in evictions, foreclosures and a monumental decrease in property value. Bankruptcy became the only option for a plethora of businesses, large and small, whilst consumer wealth declined and investment stalled.
By the end of 2008, manufacturing output in the UK had dropped by 8%, as established businesses and their potential saviours in the investment firms were filed in to Room 101. With speculation swirling around the possibility of a double dip, output in the last quarter of 2010 again fell by 0.5%. Unemployment rose by 8.1% to 2.57m, while GDP to this day remains 4% below its pre-recession peak.
In the same period, Mayfair – like a faint pulse to a paramedic – became a vital indicator of the intangible benefits long-standing prestige can afford an economically lifeless city, country, or even continent. Between late 2007 and late 2009, average house prices in the UK as a whole fell almost 18% from £195,000 to £160,000, with London prices dropping over 20% from £310,000 to £245,000. In the same period, Mayfair saw the average price for a detached property more than double, up from £3,550,000 to £8,250,000 as property in the area became seen as an (increasingly rare) safe investment.
It only takes a few minutes of watching the Bugatti flying squad race past Hyde Park corner, to understand why a rich man’s playground will always be a rich man’s playground. Save your Travel Inns and Nandos. Here there’s The Dorchester, where The Oliver Messel Suite – a favourite haunt of Michael Jackson and honeymoon destination of Liz Taylor and Richard Burton – will set you back a mere £2,950 per night; Fortnum and Mason’s, where Christmas cheer comes at a Scrooge-busting £5000 per hamper. And, Selfridges – where the world’s most expensive sandwich will set you back £85 (heaven knows what an actual fridge would cost).
The old money of Russia, China and the Middle East continued to flow in to recession proof Mayfair property. But, with them came a new generation of wealthy Europeans eager to protect their hard earned wealth from the tremors of the Eurozone Crisis, in what Savills’ director of residential research Lucian Cook described as a “safe haven effect”. Analysts speculate that this effect accounts for a 30% boost in prices for prime central London property, with standard residential property selling for six times the national average. In the six months leading up to June 2012, web searches for property in Mayfair from Greece, France and Spain rose by 50%, 10% and 9% respectively.
Figures from serviced offices represented by Search Office Space suggest a distinct correlation between the recession and interest in Mayfair property, with over 20 new business centres opening in the district since 2007, compared to only nine in the preceding decade. All have seen viewings increase incrementally, with few desks left to gather dust. Who wouldn’t fall instantly under the charm of an elegantly modernised Georgian office, with bespoke hard wood furnishings, private gardens and that all-important W1 post code?
Executive Office Group’s Brook Street business centre, for example, is housed within a characterful red brick property; a hexagonal tower looks down towards Grosvenor Square through lengthy sash windows, whilst the interior is an opulent mix of Art Deco sophistication, period embellishments and contemporary technology. World-wide serviced office group Regus have put faith in 21st century functionality at their Berkeley Square property, with a sleek cocktail of fluid lines, hidden lighting and a generous cellular desk structure – all housed within an energy efficient exoskeleton. These are no ordinary offices…
For some, it will seem as though 2007 was the year Mayfair declared independent sovereignty, presided over by an autocratic reputation for prestige and wealth. The cuisine, accents, signs and architecture would be a novelty to most. But, for others it is just a holiday home; a safe little runner for what the new global elite call ‘small change’.
“contributed by Ben Parkinson” https://twitter.com/parkinson_b