Russians’ US$10.7 billion UK property ownership comes under spotlight as London moves to stamp out ‘dirty money’, says Aston Chase
- The UK has accelerated plans to crack down on money laundering with sweeping new laws to register foreign owners of British property
- Wealthy Russians who were previously cash buyers ‘are now arranging finance as they are worried about the UK government freezing their funds’, says the property agency
Russians own about £8 billion (US$10.7) worth of property, businesses, and other assets in the UK, according to a survey conducted by property agent Aston Chase.
“If the crackdown on so-called dirty money becomes severe, for example through retrospective investigation, then there will inevitably be a shift of wealth out of the UK,” said Aston Chase.
The UK has accelerated plans to crack down on money laundering with sweeping new laws to register foreign owners of British property and expand government powers to investigate the sources of their wealth, according to Bloomberg.
Last Thursday, Prime Minister Boris Johnson said he would push forward legislation on a long-stymied register of overseas property ownership as the UK sanctioned more than 100 Russian individuals and entities, part of a coordinated push by Western countries against Russian companies and oligarchs in the wake of that nation’s invasion of Ukraine.
01:57
Russian military claims Chernobyl nuclear plant under joint protection with Ukrainian forces
Meanwhile, the UK, European Union, the US and allies have agreed to exclude a number of Russian banks from Swift, an international payment system used by thousands of financial institutions.
The move aims to hit the country’s banking network and its access to funds via Swift, which is pivotal for the smooth transaction of money worldwide.
Still, Russians continue to buy, but they are having to change the way they go about it.
“Where some were previously buying as cash buyers they are now arranging finance as they are worried about the UK government freezing their funds and want to stay liquid,” said Aston.
Aston said many high net-worth Russian families already have money and assets outside Russia.
Aston Chase recently helped a young Russian couple to buy an £11.5 million newly built 6,000 square-foot Regency style townhouse mansion with four reception rooms, five bedrooms, a private cinema, gymnasium and spacious rear garden just off Hamilton Terrace in St John’s Wood.
Another Russian buyer bought a seven bedroom property on Hamilton Terrace for about £25 million, it said.
“In our experience, buyers from Russia are predominantly looking for houses. However, they are also prolific buyers of large lateral apartments in new developments with the amenities that high net-worth individuals have come to expect in today’s luxury London market,” said Mark Pollack, co-funding director at Aston Chase.
The spike in Russians acquiring homes in London started in 2008 when former Prime Minister Gordon Brown introduced the Tier 1 Investor Visa which allowed successful applicants to reside in the UK in exchange for an investment of £1 million in government bonds.
Wealthy Russians living in North West London include billionaire Alisher Usmanov, who owns Beechwood House off Hampstead Lane.
Andrey Guryev, with a net worth of US$6.4 billion, is rumoured to be the owner of Witanhurst Mansion in Highgate which is understood to be the second largest private residence after Buckingham Palace.
