Avid readers of this blog will have seen my post on property wealth and how London is a world of its own. To follow on from this, let’s look at property wealth in a slightly different way.
Let’s take Westminster and Kensington and Chelsea – the two authorities with the highest private property wealth in England at around £128 billion and £100 billion, respectively. At a combined private property wealth of over £228 billion, how does this compare to countries’ output (GDP)?
The results are shocking. Together, the private property wealth of Westminster and Kensington and Chelsea is larger than the GDP of the UAE (£226 billion), Denmark (£186 billion), Portugal (£125 billion) and Ireland (£124 billion). The property wealth found in these two London boroughs is larger than the output of 160 individual countries and is larger than the combined output of the bottom 73 countries.
When compared to larger economies, these two boroughs’ wealth still stacks up highly. The combined property wealth is around half of the GDP of oil-rich Saudi Arabia and half of the GDP of the Netherlands.
Of course, this comparison is somewhat tongue-in-cheek because it isn’t strictly accurate to compare wealth to output. Indeed, many commentators – most recently the French economist Thomas Piketty – have looked at the relationship in terms of wealth concentration and whether the wider population share the spoils of output growth.
Obviously, this topic is beyond the scope of this post. However, what these figures do show is the enormous amount of wealth located within two of the most expensive boroughs in London, highlighting the sheer scale of the housing problem.
Moreover, is this sustainable? Is it inevitable for a global city?
This blog post was first published here.