The war in Ukraine is making it hard for even unsanctioned Russians to sell exclusive residential property in Britain. Adding to a shortage of supply that has helped drive up house prices in prime locations.
THE BIG SQUEEZE
A widespread shortage of available properties has pushed up prime London prices by 4.7% since the invasion. According to agents Benham & Reeves, although prices in Belgravia and Knightsbridge – have climbed slightly less, at 3.3%.
The number of prime central London residential sales was down 30% between March and May compared with last year. Though still up on pre-pandemic levels, according to property data firm LonRes.
Britain in February scrapped its so-called “golden visas” for wealthy investors and last month announced plans for a new economic crime bill; intended in part to identify the owners of property in Britain and combat illicit finance, although critics say loopholes remain.
One unsanctioned Russian failed to secure three lawyers before finding one willing to help him sell an expensive London property.
Unprecedented Western sanctions on Moscow, the withdrawal from Russia of scores of Western companies and pressure on London’s advisory companies to cut links with Russian clients have driven some Russian buyers to friendlier property hotspots such as Dubai or Istanbul.
International buyers have accounted for at least a third of property purchases in prime central London locations in every quarter between 2011 and 2019, according to data from Statista.
A prolonged war, tighter regulation, rising interest rates, raging inflation and brutal stock market drops could yet take the heat out of some of that growth, agents added.
“The property market has been flying over the course of the last two to three years,” said Garrett. “All of these cycles have to slow.”