When Barack Obama stares out of the windows in slow moments during the G20 summit in the ExCel Centre in London's Royal Docks this week, he's in for a pretty bleak view. There wasn't much here of any beauty before the war and, more than 60 years after the Luftwaffe obliterated most of the Victorian housing stock, there's even less. The Tate & Lyle refinery down the road pumps out sugary smoke over City Airport, built on derelict dockland. On the horizon, the towers of Canary Wharf have lost a bit of their glamour.

As the President heads west, he might catch a glimpse of some finer things: the Tower of London, St Paul's. What he won't see is anything beautiful built in the past decade or so. After 15 years of boom time in the Square Mile – 15 years of colossal tax revenues – there's barely a thing to show for the greatest flow of money through this country in history.

Last week, I climbed the dome of St Paul's Cathedral for the first time since my childhood. For all the pounding the City took in the Blitz, the highlights of the view were all pre-war: Tower Bridge, Wren's City churches and the cathedral itself. Those churches and the cathedral were built on the proceeds of a small, late 17th-century tax on coal, a drop in the ocean compared with the trillions that Gordon Brown has collected since 1997.

There are lots of new buildings all around St Paul's but what a dreary, indistinguishable bunch they are. Modern architects have forgotten the art of how to finish off buildings. While the dome around me swelled, then narrowed to a slim, graceful pinnacle, while Wren's churches tapered to elegant spires, the modern buildings had just been sawn off with flat tops. A few exceptions did stand out – the Gherkin and City Hall – attractive and memorable because they use curves and are topped off with something other than a horizontal line. But original, alluring buildings such as these are too rare to counter the impression that this fabulously rich age has also been a fabulously ugly age.

The same goes for the rest of Britain: the flood of money has rushed through the nation without touching the sides. I can't think of another time in British history when a period of spectacular wealth and vast individual fortunes has not led to great bursts of beauty. From the Norman Conquest until the 19th century, royalty and the wealthy between them built the greatest collection of castles, country houses and churches in the world. Georgian landowners and speculators produced thousands of miles of fine terraced housing that has lasted three centuries. The Victorian industrial boom yielded the greatest collection of railway stations on earth, and a tremendous set of municipal museums, galleries, town halls and industrial buildings. Philanthropists built almshouses, hospitals, churches and chapels.

But, in our age of spectacular wealth, nothing of any beauty. No new churches, but hideous new buildings from a Government that takes pleasure in destroying those terraces (particularly in the North-west, thanks to John Prescott's wicked Pathfinder scheme), and billionaires with no philanthropic instincts, who delight in buying pretty old houses, gutting them, and turning them into empty white stucco shells.

Lots of our old buildings have been admirably spruced up, including St Paul's itself. The Portland limestone façade gleamed bright white in the spring sun last week. Other cathedrals and some churches have had a little lottery money. And, after the destruction – from the First World War to the 1980s – of thousands of country houses, the future for the best of those that remain looks secure.

We have lost the Sixties' vile hatred of old things, but we have also lost the ability to create beautiful new ones – literally, in the case of some architects. I met one recently who didn't know what the classical orders of architecture were.

In his new book, Beauty, Roger Scruton compares the brutal neighbours of St Paul's with the pretty, modest buildings around Santa Maria della Salute in Venice, the vast domed church that crowns the Grand Canal. The principal virtue of the Salute's neighbouring buildings lies precisely in their neighbourliness, their refusal to draw attention to themselves or claim the exalted status of high art.

Architects, and their patrons, have lost a crucial quality of beauty that Alberti, the first great architectural historian, put forward in his De Re Aedificatoria (1452). And that quality is concinnitas, the appropriate fitting together of part to part – the understanding that, if you are building in the shadow of a beautiful cathedral, you must defer to that beauty. In our arrogant, history-disregarding age, a little concinnitas is too much to hope for. The pursuit of beauty is considered a retreat from the real creative art, which is to challenge comforting illusions and to show life in all its ugly, functional reality.

Louis Sullivan (1856-1924), the Chicago architect considered the father of modernism and creator of the skyscraper, first declared that form should follow function. Occasionally beauty is a by-product of functionality. The Millennium Bridge from St Paul's to Tate Modern, with the extraordinary economy of material that comes with steel, makes for a lissom, elegant beauty. There's a similar effect at the Millennium Stadium in Cardiff, the Millennium Bridge in Gateshead and even in the great white, steel elephant, Wembley Stadium. But these are rare triumphs of functionalism, designed for practicality over beauty.

Once the concerted search for beauty as an aim in itself disappears in supposedly more decorative buildings, then it doesn't matter how much money you throw at your headquarters or your handsome Victorian terraced house. If your values are so skewed, the likely outcome is extreme ugliness. It's enough to make Obama halt his motorcade at the cast-concrete monstrosities by St Paul's, climb to the Whispering Gallery, and weep.

Harry Mount's A Lust for Window Sills: A Lover's Guide to British Buildings from Portcullis to Pebble-Dash is published by Little, Brown