Opinion  

Retreat of Russian money will not hurt UK property market

Marc von Grundherr

Marc von Grundherr

As sanctions on Russia, and indeed Russian nationals, start to bite, assets owned by those that anticipate being targeted next are seemingly being hastily sold or transferred into third-party ownership.

It is a fire sale of prime property, art, classic cars, company shareholdings, football clubs and safety deposit box contents the likes of which the world has never before seen. 

It is speculated that the UK authorities may soon start to seize homes where they can trace the ownership back to those that are on the sanctions list; the oligarchs and politicians that are said to support and enable Vladimir Putin. Michael Gove, secretary of state for levelling up, is the driving force behind such a move and has vowed to do so without considering anything at all in the way of compensation to the owners.

London Mayor Sadiq Khan has joined the call and the US administration are also considering similar. France has drawn up a ‘hit list’ of target assets and has already seized an 88 metre super-yacht owned by oil company Rosneft boss Igor Sechin, from its Cote d’Azur mooring. 

It seems therefore that government auction sales are going to be remarkably busy and interesting places in the coming months as the focus of the sanction net is spread ever wider.

In the world of London property estate agents’ chatter is all about the implications of depriving the housing market of this key source of buyer demand. The media often conjures an image that Russian billionaires splash their cash copiously around the capital, whereby every other Stucco Victorian terraced house in Eaton Square, Kensington Palace Gardens or Pont Street is owned by someone with a surname ending in ‘ov’ or ‘ova’. And in the face of this, agents from Knightsbridge to The Bishops Avenue are now squirming at the thought of the tap being turned off.

It is true that Russians buy London homes and that to them, as with other nationalities, there is a certain trophy-like achievement to owning London dirt. 

But I have to tell you – quietly and so that no egos are damaged by my proffering – that Russian property business in our capital city is not all that. What I mean to say is that the sanctions placed upon Russians, even if it were all Russians, will not even dent our housing market. Not one bit.

Of course, I say this with no disrespect, but frankly there are very many nations that out-perform Moscow and St Petersburg-based buyers for UK property ownership.

It is estimated by anti-money-laundering expert Credas Technologies that 1,127 homes here are owned by those with Russian addresses; 87 of these are in Westminster and just 30 in Kensington and Chelsea. Yes, many others will be owned via shell companies but that applies to other countries’ registrations too, and yet Russia does not even feature in the top 20 of those that own London homes.