Russian Oligarchs Buy Up UK Homes as Ruble Slumps

MOSCOW, December 18 (Sputnik) — The ruble crisis has triggered real estate sales in London to skyrocket as ultra-rich Russians are eager to purchase luxury property in an attempt to preserve their wealth from the slumping economy; however, wealthy homebuyers from Russia have dramatically declined in numbers with only the richest having survived.

 

This week London has seen a rush on its real-estate market, as rich Russians are desperate to move their money out of the ruble-zone amid the ongoing currency crisis. The ruble has lost roughly 50% its value this year with the fall accelerating dramatically early this week.

According to estimates by London-based Beauchamp Estates, luxury London housing sales to buyers from Russia bounced by 10% this year, as reported by the Telegraph. Wealthy Russians are also looking for investment properties, which was not the case until recently.

"I currently have half a dozen Russian clients urgently looking to spend over £20m each on buying a new home in central London," Gary Beauchamp, founder of Beauchamp Estates, told the Telegraph. "Now that their commercial ventures in Moscow have slowed, they are seeing London real estate investment as a commercial opportunity."

However, wealthy Russians are declining in number in London with only the ultra-rich ruble-earners being able to afford the more expensive UK living standards. The recent influx of foreign investment in the UK is driving prices higher, washing 70% of Russian buyers off the UK market during the recent year, according to data by Christie’s International Real Estate, Bloomberg reports. Properties costing less than 10 mln GBP ($16 mln) are not in demand anymore as only the oligarchs persist. But even the ultra-rich Russians may soon be driven off the British market as another wave of international sanctions is looming.

“The banks are limiting what they can withdraw and we’re expecting further impact as sanctions kick in,” a consultant working with several Russians on real-estate deals totaling 180 mln GBP told Bloomberg.

The increasing Russian presence in London’s overheated prime property market may evaporate in case the international situation escalates, triggering a new round of international sanctions.

“The sanctions are really beginning to bite on expensive property in London, on top of all of the tax which the government introduced in the autumn budget,” Andrew Langton of Aylesford International Estate Agents told Bloomberg. “It’s killed the golden goose.”

Russian buyers purchased 21% of homes sold at 10 mln GBP or higher from May to October this year, a 13% increase compared to the previous half year, according to a report by Knight Frank LLP. While the Ukrainian crisis has spurred Russian purchases in London, the market is likely to be dominated by money coming from India and the Middle East, observers say.