Comment: The new wave of Russian buyers descending on our shores
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Director of north west London estate agents, Glentree Estates welcomes the return of the Russian buyer
Three years ago there were more Russians that you could ‘shake a stick at’ hoovering up a plethora of prime properties in London, with gay abandon. We not only thought ‘the Russians are coming’, it was an avalanche.
Originally, after the Cold War collapsed in the 90s, the first Russian families started to set up homes in Highgate, since this was near to the Russian Trade Delegation Compound, in Highgate West Hill, and strangely enough, close to Highgate Cemetery where ironically, Karl Marx is buried. It was interesting to note that when former Soviet spy, Alexander Litvinenko, died (he was allegedly murdered by drinking tea laced with Polonium 210, whilst being entertained by the Russian agent called Lugovi at the Millennium Hotel in 2006), his lead lined coffin was buried in the same cemetery.
Over time, as the Russian communities grew, restaurants with Russian cuisine, supermarkets and specialist wine stores began to spring up around London, such as Hedonism Wines, in Mayfair.
When the sanctions were imposed, a number of years ago, as a result of Putin’s ‘land grab’ of Crimea, the flow of Russian buyers was stemmed. The Moscow Stock Market and the Ruble were badly affected and, furthermore, a tax was imposed to stop the flight of capital leaving the country.
We thought that the ‘golden goose’ had stopped ‘laying golden eggs’.
However, much to our delight, in the last three months we have seen them back again with new found, gusto.
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To quote a notable Russian client of ours, ‘we didn’t buy property in London when Sterling was cheap in 2008 and with the post Brexit drop in the currency now, we are not going to lose the opportunity again’.
Fundamentally, Russian’s see the drop in residential property prices, in key parts of London, of up to 25 per cent due to the Stamp Duty/Non Dom changes and, together with the Sterling currency discount, it is an irresistible opportunity for them to ‘bag’ some prime London residential assets that effectively, can be bought for up to 50 per cent less (in aggregate) than would have been the case in 2014.
No key metropolis in the world offers this incredible inducement and to find it in the ‘greatest city on earth’, London, is ‘party time’ for them.
The Russians are not just buying finished products that provides them with instant gratification, but, even raw parcels of land without planning consent, where the gestation period from original purchase to moving in, could be 4-5 years.
In fact, a Russian buyer has just gazumped a Chinese buyer in Highgate for these very reasons.
Whilst Brexit discussions with the European European Union does provide some uncertainty, the effects of this in devaluing Sterling against the Euro/Dollar, is a ‘win,win’ for the Russians.
They love our culture and our socially liberal, environment with a stable, political and economic backdrop and it is good to see them back again. As they say in Russian, ‘dobro pozhalovat nazad’ (welcome back).
Trevor Abrahmsohn, director of Glentree Estates