Capital author John Lanchester: “The British obsession with property is mad”

The novelist and financial journalist is a Dickens for the 21st century - and our obsession with house prices and bankers is in his sights

Are you getting the bill?” asks John Lanchester, author of the bestselling 2012 novel Capital, now, as they say, a major BBC television production. “I thought the BBC was paying,” I reply. We’ve only had afternoon tea, but the prices in this madly trendy five-star Soho hotel could be ruinous. “I don’t know if it is,” he says. “Let’s do a runner.” A what? “A runner. Slowly, though, then no one will notice.”

And so I accompany a balding 53-year-old in jeans and plimsolls on a tortuous creep through a dining room where the fashionable and wealthy guests gabble on, impervious to the fact that the man leaving without paying is responsible for perhaps the most cogent critique of capitalist greed in the last ten years. “Keep going,” he says. “Just look straight ahead.”

Lanchester can be excused for taking financial liberties. We’ve met just after a BBC screening of the first episode of the three-part television adaptation of Capital, scripted by Marvellous and Occupation writer Peter Bowker and starring Toby Jones as pre-2008 crash, snout-in-the-trough banker Roger Yount. The critics have gone bonkers.

As most of them own homes in London you can see why they would enjoy a drama in which the value of London property keeps going up. But if you’ve read Lanchester’s book, set on the fictional Pepys Road in south London, you’ll know that that isn’t necessarily a good thing.

“I wanted to write a novel about house prices,” Lanchester tells me as we sit down. “Because that’s the only thing anyone ever thinks about in London. People are obsessed with what their property is worth. It’s mad. We think it’s the norm but it’s not like that in other places. People in the rest of the country look at Londoners as if they’re tribespeople from the Amazon. In a way it means London and the UK are sort of doing the splits. Actually, London and the rest of Europe are doing the splits.”

Lanchester isn’t from London. He was born in Germany and spent much of his youth in Hong Kong. “I came to London as an outsider,” he says. “And I see London as a magnet for people with a fantasy of making it, and I see the inequality. When I started the book my wife said there was something 19th century about London and she was right. Dickens would have totally got what London was like before the crash.”

The title of Lanchester’s book cleverly suggests both the city we’re sitting in (capital of the United Kingdom and the world’s financial markets – though New York might argue the toss) and Karl Marx’s Capital, the communist philosopher’s world-changing critique of how capitalism works. But Lanchester’s Capital is also about people; the traffic wardens, Pakistani corner-shop owners and pensioners who inhabit a south London street where the equilibrium is threatened by wealthy incomers like Roger and his status-obsessed wife, Arabella (played in the drama by Rachael Stirling). Shop owner and banker alike are thrown into disarray when they start receiving anonymous postcards bearing the words, “We want what you have”.

Ideas for zeitgeist-defining books rarely arrive as the author gazes out of his window but this one did. “I was aimlessly pootling, just looking out at the street,” says Lanchester. “I noticed that places were constantly being done up and that things were coming to the houses as if the houses themselves were people, rich people, and that was the image where the book began.”

Lanchester has been looking out of the window of his Clapham house for 20 years, in which period its value must have passed the £1 million mark – though when I ask him he claims not to know. “That’s another thing that happens in the property market,” he says. “People feel they’re investment geniuses, just because they haven’t moved house. My dad used to say, ‘All you need to be an investment genius is a short memory and a rising market.’”

His father, long dead, was one of those “Captain Mainwaring-type bankers”, who would have been “absolutely appalled” by what happened in the banking sector. “He was very much in my mind when I wrote about these things. When I was a kid he’d point out places that, when he had been the local branch manager, he’d provided with an initial loan for something that had then become a factory or a thriving business.”

The 1986 Big Bang, when Margaret Thatcher deregulated financial services, marked the end of old-fashioned banking, says Lanchester: “What they used to call ‘363 banking’, where you take deposits at three per cent, you lend money at six per cent and you’re on the golf course by three o’clock.” Britain’s banks began to gamble on derivatives and futures, playing with what proved to be toxic chips. “What that’s got to do with Captain Mainwaring banking isn’t clear to me,” says Lanchester of a system that meant ordinary citizens carried the risk in the bankers’ baroque game of chance. “It’s fine having a thriving casino, as long as it doesn’t cost you money if you’re not betting in the casino.”

Lanchester’s factual account of the banking crash and his explanation of what went wrong, Whoops! Why Everyone Owes Everyone and No One Can Pay, was published in 2010, when he was halfway through writing Capital. He says he had to write it to save the novel. “I had so much research material that I risked having scenes like, ‘As Roger looked out towards Canary Wharf in the distance, he struggled to remember the definition of lateralised debt obligation,’ and that would have killed it.” 

As well as being a highly regarded fiction writer – his first novel, The Debt to Pleasure, won the Whitbread First Book Award in 1996 – Lanchester is a financial journalist and popular commentator on whether we are heading for another crash. He remains hopeful for capitalism. “The answer isn’t Che Guevara caps and singing the Internationale before breakfast,” he says, but, rather, rethinking our obsession with owning property. “Singapore often comes top of surveys of the three most liberal economies in the world,” he says. “But there are no private houses in Singapore – Singapore has the highest level of council housing in the world. That’s one of the reasons it’s such a stable, successful economy.”

But what, I ask him, about an ordinary Londoner, a clerk or nurse, who owned a house on a street like his and found themselves able to sell up? That’s a life-changing bit of good fortune. “It is for them,” he says, “but what’s the cost for society more generally? It’s like the lottery ticket – a select few win once, but once that clerk or nurse has sold up no clerk or nurse will ever live in that house again. It changes the nature of London.”

Lanchester’s own ascent of the London property ladder is an unlikely one, taking him to his Clapham millionaires’ row via a grimy bedsit in King’s Cross. “I was working at the London Review of Books,” he says, recalling his job on the small-circulation literary fortnightly. “It was my first job and I bought a small, manky one-room flat in King’s Cross in 1988. I got a mortgage, borrowed the money. It was exactly the wrong moment to do it because prices then went down and I lost a ton of money in the housing crash of 1989. It wasn’t 1889, it wasn’t 1789. It was 1989, and yet by about 2005 everyone had forgotten about it. You’ve had two price crashes just in my adult lifetime. I’m not that old, and it’s gone pop twice. And yet, it’s as if it’s a one-way bet and it can only ever go up – in London, anyway. That’s a really strange and interesting thing, that there’s such a collective amnesia.”

Today a staffer on a literary magazine would find it impossible to trade up from a bedsit to a house in Clapham. “Well, eventually the flat recovered and started going up,” he says. “It seems like a long time ago and another world, but there was a point when houses weren’t very expensive.”

The Pepys Road in Capital isn’t his street, he says. “It’s not actually where we live; I grafted various features from different streets around us, but the area is the area.” He also points out that the houses on his street, the real street, “would be worth a lot more” than the houses on the fictional street: a quick online check shows a price of more than £3 million for the most expensive house there.

Does he not check his house price? 

“No, I never do. Why would I? I’m not moving.” Oh come on, everybody does.

“But genuinely, why would I? We’ve got kids, we like it there.”

You don’t go on Zoopla?

“I don’t look at anything like that. I never self-Google or read reviews, or look at myself on Amazon. What would I do differently? I’m not going to go and live in Santiago.”

Sorry, you really don’t go on Zoopla?

“No, I don’t. People end up only thinking about that and looking it up every ten minutes, and you shouldn’t! Where you live is just where you live. In modern Britain, especially in London, we’re slightly mistaking money for where other values should be. We have money values where other values are more important. We’re talking about a moral thing. The British obsession with property is mad.”

Outside in Soho I’m ready to say goodbye but Lanchester wants to show me something on Dean Street. Once a bohemian thoroughfare where music, art and world-changing ideas were dreamed up, it has since morphed into a retail-centred, high-rent glimpse of where London is going. “Look up there. See that window?” I follow his gaze. “That used to be Karl Marx’s sitting room. It’s a private members’ club now.”

The bill for afternoon tea was subsequently paid…

Capital begins tonight at 9pm on BBC1