London property market could ‘see a rise in Russian property’ – Property Industry Eye

Overseas property investors have long viewed London as a safe haven thanks to the UK’s transparent legal system and strong tradition of rule of law. It helps explain why Benham and Reeves believe there could be an increase in Russians buying homes in the capital this year.

The Russian economy is expected to plunge into a deep recession due to Western sanctions and the country’s growing isolation after the invasion of Ukraine.

Economists said the measures imposed on Russian banks and businesses by the US, EU, UK and their allies are having a major impact on financial markets in Russia and will hurt the entire economy. country’s economy over time.

Benham and Reeves director Marc von Grundherr commented: The London market has always been a safe haven in times of crisis and with many looking to escape a plummeting Russian economy, chances are London will be their destination of choice.

The latest analysis of the property market by Benham and Reeves found that purchases of Russian residential properties contributed an estimated market value of £190m and £13.2m in stamp duty in 2021.

Some 82,305 residential property sales took place on the London market last year with a market value of £55.7billion, while homebuyers paid £3.7billion in stamp duty .

In addition to these primary purchases, another 13,016 transactions took place for additional purchases such as second homes and buy-to-let investments.

Around 30% of this market activity is thought to have been attributed to international buyers, with Russian buyers accounting for 1% of all market activity.

This means Russian buyers accounted for around 247 purchases of prime residential properties on the London market in 2021, with a total market value of £167m, paying just over £11m in stamp duty in the market. process.

Benham and Reeves also estimate that Russian buyers completed around 39 second home transactions with a market value of £22.8m, paying £2.2m in stamp duty at the highest rate for this. type of purchase.

In total, Benham and Reeves estimate that 286 London properties were sold to Russian buyers in 2021, worth just under £190million in market value and earning the government almost £13.3million in royalties. stamp.

von Grundherr said: “Russian activity has long contributed to the overall health of the London property market, with the power of the ruble traditionally prevalent in London’s top areas.

“However, activity by Russian buyers still represents only a very marginal proportion of market activity and, although the rapid implementation of economic sanctions against Russia may have a ripple effect here in the capital , they will certainly not cause a market decline of any kind.

“In fact, while this segment of international buyers is expected to shrink as assets are frozen and the Iron Curtain comes down again, it is likely that we will actually see an increase of Russian property.”

Data from the Land Registry Price Paid:

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