Iranian investors predicted to bring over £1 billion to London’s residential property market

Prime London addresses such as Hampstead are a big draw for Iranian ultra-high-net-worth investors

Prime London addresses such as Hampstead are a big draw for Iranian ultra-high-net-worth investors - Credit: Getty Images/iStockphoto

Hampstead and St John’s wood are tipped to be top locations for wealthy Iranians looking to buy in the capital post the lifting of EU sanctions

The lifting of sanctions on Iran could see £6 billion invested in overseas properties in the next 5-10 years, according to new research from Rokstone and New World Wealth. The report suggested that between 5 and 20 per cent of this money could flow into the London residential property market.

The London residential market is set to benefit from ultra-high-net-worth Iranian buyers who are keen to invest, with a 25 per cent increase in Iranian house hunters in the capital predicted over the next two years.

Becky Fatemi, the Iranian-born Managing Director of Rokstone, said: “London will be Iranian’s top location for investing in real estate. Culturally if you are wealthy in Iran you invest in property and jewellery/gold as long term assets.”

Hampstead and St John’s wood are predicted to be some of the most popular locations for wealthy Iranians, along with Knightsbridge, Mayfair and South Kensington.

“The new generation of Iranians will be wealthy business people who have prospered in Republican Iran ­ it’s a whole new generation and outlook,” explained Ms Fatemi. “This is the new business elite, not the old Royal Court. However, the grandparents and older generation still remember London’s best addresses.”

It’s not just fond memories and posh postcodes that provide a draw for wealthy Iranians. The British education system is held in high esteem by families looking to buy a pied-a-terre for their children whilst they study in London. Rokstone predicts that newly refurbished and new builds will be the most popular with this type of clientele, whose budgets will be between £1 million and £30 million.

Sanctions were lifted in January following the nuclear deal, and property buyers are predicted to move fast. Rokstone reported that it will take buyers 12 months to get their tax structuring in order, and a further three to six months to find the right properties to purchase.

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London and Tehran have a long and complex political history underpinning this new surge in property investment. Britain colonised Iran in the 19th century, and in 1913 a contract was enforced under colonial rule that entitled the British Government to all of Iran’s oil supply. British involvement continued into the 20th century, with troops occupying the country during World War II.

Post-war, British-Iranian relations continued. “Between 1945 and 1979 the Shah of Iran, his Royal court and the business elite had lots of ties with Britain and the elite owned luxury residential property in London,” said Ms Fatima.

Following the 1979 revolution and the fall of Shah and Queen Farah, many Iranians fled into exile in London. An estimated 80,000 Iranians still live here today as part of flourishing expatriate community, which acts as a another pull factor for fellow Iranians looking to buy in the city.

The report also highlighted several significant push factors in play. Sanctions could be reintroduced at short notice, so wealthy Iranians are keen to get money out of Iran as swiftly as possible.

The volatile situations in neighbouring Iran and Syria also provide a significant incentive for making investments in a location as comparatively politically and economically stable as London.

Finally the ability of the London real estate market to retain and increase in value makes it a safe alternative to the falling price of oil and gas.