The sharp fall in the Russian ruble is having an impact on the British capital—It’s sparked a wave of near panic-buying at the top end of the London real estate market.
President Putin once dismissed Britain as a small island nobody pays any attention to anymore, least of all the Russians, but that hasn’t been Gary Hersham’s impression.
“In the last few weeks, we’ve noticed an upturn in the number of enquiries we’ve had from Russian purchasers,” says Hersham, the founder of the upscale Beauchamp Estates. He has half a dozen Russian clients clamoring to spend as much as $30 million each on a London home. “These are all cases of people wishing to live in London more or less permanently,” he adds.
And he’s not the only London realtor enjoying a boom as Russians scramble to protect their wealth. Becky Fatemi of the Rokstone agency claims to have registered six new Russian clients over the last week—practically a stampede in the discreet world of the super rich.
They’re coming to London, says Fatemi, because it’s a home away from home for them; a quarter of a million mostly wealthy Russians already live in the British capital. “London works for them due to its proximity to the south of France, Cannes, Monaco, Ibiza and other summer hotspots,” says Fatemi. “New York is a seven-hour flight, Russia is a four-hour flight. And here they can feel safe and secure.”
Rich Russians are made very welcome in Britain. If they have more than $3 million to invest, they can get a visa in as little as 24 hours; if they have more than $15 million they can apply for citizenship after only 2 years. The number of British “investor visas” issued to Russians soared by 69 percent in 2014 as they fled the economic crisis at home.
But one well-known British realtor says the Russian bonanza could be short-lived.
“I think there will be a slashing of demand from Russian buyers in London and indeed in other major cities,” suggests Russell Quirk, boss of the eMoov online real estate firm. He says the current flurry of interest is from Russians who anticipated the ruble collapse and got their money out beforehand. Now he thinks there could be a Russian sell-off at the top end of the London market.
“You might be persuaded to liquidate your UK assets in order to have money because your Russian assets have plummeted in value,” says Quirk.
Marketplace is on a mission.
We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.
Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?