The ceiling falls in on London's poshest builder

The firm renowned as "London's poshest builder" has collapsed, in a grim demonstration of how the recession has even caused the mega-rich to hold on to their money.

Robin Ellis Construction is famous for giving top-of-the-range makeovers to the homes of the super wealthy and famous. They were the people you hired to convert your basement into a swimming pool, or install a car lift – if you were in that income bracket.

But conditions have changed dramatically since the confident interview Mr Ellis gave in 2006, when he said that "London is so awash with money now. I can only compare it to 15th-century Venice for opulence and wealth".

Then it seemed that bankers, rock stars and other multimillionaires were queuing up to hire his firm to provide those well-crafted touches that would make their hugely expensive central London homes even more valuable. It was said that his average job was worth about £3-£4m and you had to join a queue. Mr Ellis, 54, was placed 1,794th in the 2008 rich list with a fortune said to be £40m.

But since the collapse of Lehman Brothers in September, his elite clientele have stopped seeing luxury home improvements as an investment.

"It's all about confidence, as far as I can see," Mr Ellis said yesterday. "It's not that London hasn't still got a very large number of very wealthy residents. It's just that people were minded to spend money on their property when they thought that would enhance its value. Now they are not sure. Two years ago it was frankly ridiculous the way in which property prices were going up, and the way in which people were trying to outspend each other.

"It was somewhere around the time of the Lehman collapse when projects were put on hold. Unfortunately, our top-end market was particularly focused on the financial sector, American and European bankers. We might have survived had we had a lot of what I'd call petrodollar clients. As it was we suffered a strangulation of cash flow."

The 35 employees of both Robin Ellis Construction Services and Robin Ellis Projects have been given redundancy notices, although three smaller companies, including a maintenance firm, will carry on in business. Mr Ellis started the firm, based in Primrose Hill, in 1984, and survived two recessions. One famous project included installing a lift with fingerprint technology that would stop at the floor where the private art collection was housed only if the owner's thumbprint was pressed on the sensor. Another involved a swimming pool that could be converted into a 120-seat concert hall, at a cost of £5m.

His reputation has also caused some myths to grow up around him, including that he was redesigning Mick Jagger's London home. Though his clients included some celebrated rock stars, the Rolling Stones singer was not one of them. Sadly, it is also not true that there is a house in Kensington redesigned by Robin Ellis with a chute hidden in a bedroom wardrobe so that its owner could climb out of bed and slide directly down to the swimming pool, two floors below. "This story appears all over the press, and I don't know who invented it," Mr Ellis said.