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Boost for luxury London property prices as Russians locked in

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London, June 28 (Reuters)-The war in Ukraine made it difficult for even unlicensed Russians to sell exclusive homes in the UK and helped boost home prices in prime locations. In addition to supply shortages, real estate sources say.

Russian oligarchs, Middle Eastern oil baron, and billionaire Chinese entrepreneurs have invested in real estate in London over the past three decades to obtain trophy homes and luxury commercial facilities.

However, the four-month-old invasion of Ukraine, which Russia calls a special military operation, has imposed sanctions on more than 1,100 Russians allegedly associated with the Kremlin, spreading anxiety in the so-called London grad. Frozen home sales. The agent says.

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“There are definitely a lot of unfinished transactions, two over £ 40m ($ 49m),” said Charlie Willis, CEO of London brokers’ real estate brokers. He added that he also provided advice to the buyer. Don’t move on “just because the seller was originally Russian”. He declined to give further details.

Big squeeze

According to agent Benham & Reeves, London’s prime prices have risen 4.7% since the invasion due to a widespread shortage of available properties, while prices for Belgravia and Knightsbridge, which are popular with Russians, are slightly lower, 3.3. % Increased.

“The market is underpinned by supply shortages,” said Jeff Garrett, director of mortgage broker Henry Dunnell.

According to real estate data firm Lon Res, major home sales in central London were down 30% from last year from March to May, albeit at pre-pandemic levels.

Realtor Aston Chase estimates that more than 150,000 Russians live in London, while owning £ 8 billion of real estate assets, businesses and other UK investments.

But Mark Polack, co-founder of Aston Chase, says wealthy Russians are becoming more and more cautious about getting caught up in sanctions.

“Russians don’t buy (as well) and don’t sell. Not necessarily because they don’t want to buy, but maybe they can’t, or … it might be wise to expect dust. . Calm down. “

Critics say there are loopholes, but the UK abolished so-called “golden visas” for wealthy investors in February, identifying British real estate owners last month and fighting illegal finance. Announced plans for a new economic crime bill aimed at.

Henry Sherwood, managing director of The Buying Agents, which focuses on real estate starting at around £ 5m, said the crackdown helped shatter hopes that war and sanctions could lead to a surge in Russia’s discount sales. Said that.

At the beginning of the war, he said, “We called on people to say,’Did you sell the Russians?'”

But he added:

One of the unlicensed Russians couldn’t secure three lawyers before finding a lawyer who would be willing to help sell expensive London real estate, said a real estate developer on the other side of the deal. A senior executive told Reuters.

Russian residents, including students, have also had difficulty transferring funds due to sanctions and have been forced to withdraw from the London market, said Mark von Grundher, director of Benham & Reeves.

With unprecedented western sanctions on Moscow, the withdrawal of numerous western companies from Russia, and pressure to break connections with Russian customers on London’s advisory firm, some Russian buyers are more friendly, such as Dubai and Istanbul. Driven to a typical real estate hotspot. read more

A Russian customer said he stopped buying a £ 18 million London apartment because he was nervous about British political rhetoric when Russian tanks moved into Ukraine in February. They still want a home in London, but he said the budget has been halved.

However, buyers from other regions are helping to boost the London market.

Foreign buyers make up at least one-third of real estate purchases in prime locations in central London each quarter from 2011 to 2019, according to Statista data.

Vic Chhabria, managing director of the London Real Estate Office, an agent specializing in new construction, high-rise condominiums and luxury homes, said his appointment diary was full and was of the highest interest from buyers in Singapore, Hong Kong and Mumbai. rice field. Between £ 2m and £ 20m.

Long-term wars, tighter regulations, rising interest rates, rising inflation, and a brutal stock market fall could take some of that growth away, the agents added.

“The real estate market has flown in the last couple of years,” Garrett said. “All these cycles need to be slowed down.”

($ 1 = 0.8164 pounds)

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Edited by Mark Potter

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