I cannot understand this business about only the site at no.1 getting traffic.
I also cannot understand why people are chasing just one key phrase. It does not make sense.
Analytics for one site I'm involved with tell me we had over six hundred different key-phrase searches that brought traffic to the site in one month.
If you are chasing carpet cleaning london, the amount of good quality links you need will be high, now Google knows that if all your links are carpet cleaning london, then this would be deemed unnatural linking and would get penalized by Google. You main keyword should be between 10-15% of all links, Now one of the best links now according to seo experts, is to get the naked url as the link
www.masterclean.com.
I have fell prey to this myself and I am no expert, and has cost me, one of my keywords, at No1 is worth £2500 a week, but I am hesitant to do more seo at the moment in case I get a Google slap, so I have a new domain and if that gets slapped, all is not lost.
But its easy with keyword rich domains, as these don't need a lot of links pointing back, but you have hosting, privacy and website design cost.
So it can be expensive. But is really effective is you are an owner operator and do not cover a real big area.