Russian Investors Target London’s Luxury Homes as Presidential Vote Looms
Russian investors increased their share of luxury-home purchases in London’s most expensive neighborhoods more than any other group in the fourth quarter, Hamptons International said, as Vladimir Putin bids to regain the presidency in March amid growing opposition.
Russians accounted for 16 percent of all transactions in the Chelsea, Kensington, Knightsbridge and Belgravia neighborhoods handled by the London-based broker, according to a report today. That was up from 5 percent in the previous three months and 1 point more the combined total for European Union countries.
“It’s a precaution against things going too far in the wrong direction,” Adam Challis, head of residential research, said by phone. “The very well-connected folk realized that there was going to be some serious political uncertainty and that they’re better off putting their money into London property.”
Russian Prime Minister Putin faces the biggest challenge to his rule since coming to power 12 years ago after allegations of fraud in Dec. 4 legislative polls sparked mass protests. Putin’s voter support has fallen to 37 percent, according to an opinion poll by the independent Levada Center, indicating he will need to face one of the four opposition candidates in a second-round run-off.
Haven for Investors
Buyers from the U.K. accounted for 42 percent of all transactions included in the survey, 2 percentage points less than in the third quarter. The share of deals by Middle East investors climbed to 16 percent from 15 percent, while Chinese purchasers fell to 2 percent from 5 percent.
Russian investors accounted for around 38 percent of home sales of more than 10 million pounds last year, according to Knight Frank LLP. They made up about 15 percent of purchases between 5 million pounds and 10 million pounds, the London-based broker said.
Luxury homes have performed better than other parts of the U.K. real-estate market, with values rising for 14 straight months, as overseas buyers sought safer investments and competed for a smaller number of properties for sale, Knight Frank LLP said Jan 9.
The pound’s weakness has also made the market more attractive to foreign investors. The British currency has lost about 22 percent of its value against a basket of currencies since the housing market peaked in the third quarter of 2007.
To contact the reporter on this story: Chris Spillane in London at email@example.com.
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