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

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  • Rex McKenzie

    (Kingston University London, UK)

  • Rowland Atkinson

    (University of Sheffield, UK)

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.

Suggested Citation

  • Rex McKenzie & Rowland Atkinson, 2020. "Anchoring capital in place: The grounded impact of international wealth chains on housing markets in London," Urban Studies, Urban Studies Journal Limited, vol. 57(1), pages 21-38, January.
    • Handle: RePEc:sae:urbstu:v:57:y:2020:i:1:p:21-38
    DOI: 10.1177/0042098019839875
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    References listed on IDEAS

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    1. Milberg, William & Winkler, Deborah, 2010. "Trade crisis and recovery : restructuring of global value chains," Policy Research Working Paper Series 5294, The World Bank.
    2. Leonard Seabrooke & Duncan Wigan, 2017. "The governance of global wealth chains," Review of International Political Economy, Taylor & Francis Journals, vol. 24(1), pages 1-29, January.
    3. Iain Hay & Jonathan V. Beaverstock (ed.), 2016. "Handbook on Wealth and the Super-Rich," Books, Edward Elgar Publishing, number 15737.
    4. Ansell, Ben, 2014. "The Political Economy of Ownership: Housing Markets and the Welfare State," American Political Science Review, Cambridge University Press, vol. 108(2), pages 383-402, May.
    5. Leonard Seabrooke & Duncan Wigan, 2014. "Global wealth chains in the international political economy," Review of International Political Economy, Taylor & Francis Journals, vol. 21(1), pages 257-263, February.
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    Cited by:

    1. Maj Grasten & Leonard Seabrooke & Duncan Wigan, 2023. "Legal affordances in global wealth chains: How platform firms use legal and spatial scaling," Environment and Planning A, , vol. 55(4), pages 1062-1079, June.
    2. Richard Bůžek & Christoph Scheuplein, 2022. "The Global Wealth Chains of Private‐Equity‐Run Physician Practices," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 113(4), pages 331-347, September.
    3. Rex McKenzie & Rowland Atkinson & Andrea Ingianni, 2024. "Applying the global wealth chain typology to property purchases in the Liverpool and Merseyside Area," Environment and Planning A, , vol. 56(2), pages 367-381, March.
    4. Frances Brill, 2022. "Governing investors and developers: Analysing the role of risk allocation in urban development," Urban Studies, Urban Studies Journal Limited, vol. 59(7), pages 1499-1517, May.
    5. Rasmus Corlin Christensen & Leonard Seabrooke & Duncan Wigan, 2022. "Professional action in global wealth chains," Regulation & Governance, John Wiley & Sons, vol. 16(3), pages 705-721, July.
    6. Xiao Ma & Zhe Zhang & Yan Han & Xiao-Guang Yue, 2019. "Sustainable Policy Dynamics—A Study on the Recent “Bust” of Foreign Residential Real Estate Investment in Sydney," Sustainability, MDPI, vol. 11(20), pages 1-20, October.
    7. Richard Goulding & Adam Leaver & Jonathan Silver, 2023. "From homes to assets: Transcalar territorial networks and the financialization of build to rent in Greater Manchester," Environment and Planning A, , vol. 55(4), pages 828-849, June.
    8. Lisha He & Mia M Bennett & Ronghao Jiang, 2022. "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," Environment and Planning A, , vol. 54(4), pages 653-675, June.

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