Russian meltdown sparks panic buying of London homes

LONDON — Wealthy Russians, desperate to get their money out of Moscow in the midst of the economic crisis in their country, have been panic-buying property in London this week, high-end real estate agents said.

Russia has lost control of its economy in the past several days after a massive 6.5 percentage point interest-rate hike to 17 per cent by the central bank failed to stem the collapse of the rouble, which has almost halved in value this year. The fiasco has accelerated the trend of Russians buying properties in the United Kingdom capital.

“I currently have half a dozen Russian clients urgently looking to spend over £20 million (S$41.1 million) each on buying a new home in central London. For them, the address must be Belgravia, Knightsbridge, Mayfair and Regents Park. It has got to be a prestigious postcode and, ideally, a parkside or leafy address,” said Mr Gary Beauchamp, founder of real-estate firm Beauchamp Estates.

There has also been a rise in Russians looking at investment properties, he said. “Previously, it was all end-use real estate, but now that their commercial ventures in Moscow have slowed, they are seeing London real-estate investment as a commercial opportunity. So, like the Chinese, they are now starting to purchase rental investment property and commercial assets. This has not been seen before in London by them in large numbers.”

For Ms Becky Fatemi, managing director of estate agent Rokstone, the number of Russian clients on her books has doubled this year.

“There has been a big upturn in Russian buyers since the collapse of the rouble and the slowdown in the Russian economy due to international sanctions. The Christmas season has not stopped them from looking. Currently, I have several Russian clients looking to spend up to £100 million on a home in London,” she said.

Buyers tend to be families and business people from Moscow who want big detached homes and not basement or ground-floor flats, for security reasons, Ms Fatemi added.

“They are not abandoning Russia as they are flying frequently back and forth from Moscow. What has changed significantly in the past eight months is a rise in (the number of) Russians buying investment properties in London — both residential and commercial properties,” she said.

The top Russian addresses in London include Kensington Palace Gardens, One Hyde Park, the Knightsbridge Apartments and Holland Park.

However, London could see this trend reverse over the long term as it becomes more expensive to Russians with the continued depreciation of the rouble. “Given that the influx of Russian money to prime central London significantly contributed to an overheating market, it surely follows that a reversal in demand from cash-strapped Muscovites will potentially have a significant adverse effect on the likes of Kensington, Belgravia and Mayfair,” said Mr Russell Quirk, founder of online real-estate agent eMoov.

“A plummeting Russian stock market will effectively freeze previously liquid assets and a tumbling rouble will have the effect that London has just got dearer.” THE DAILY TELEGRAPH