According to the study data for the ten months of 2006, buyers from Russia purchased real estate worth $1.5 billion — more than 240 houses and apartments costing over £1 million in the areas of Kensington, Chelsea and Hampstead. In 2000, total purchases amounted to only $150 million. Overall, as of November 2006, Russians owned real estate worth $4.2 billion in London and $400 million in the suburbs of the capital. This number includes houses valued at over £1 million ($1.9 million). This means that the Russian presence on the London real estate market is actually even more extensive.
According to Knight Frank's estimates, a fifth of all the most expensive houses and apartments (worth from $11 million) were bought by buyers from Russia. In this price segment, they have outpaced both Middle Eastern sheikhs and American bankers combined, notes the BBC citing the Sunday Times. Meanwhile, the profile of buyers is changing. Now the leading buyers are not the oligarchs who previously bought up real estate in St. Petersburg, but 'relatively inconspicuous specialists and businessmen' whose names and wealth are not well known to the general public.
The holder of the largest package of London real estate is considered to be Russian billionaire Roman Abramovich, who has spent about £50 million over the last two years buying four houses in Belgravia and four apartments in Knightsbridge. In addition, he owns the Fyning Hill estate in West Sussex worth £18 million. Another Russian businessman, Oleg Deripaska, owns a mansion in Belgravia worth $25 million, and steel magnate Vladimir Lisin last year purchased Eberukhill Castle and 3,300 acres of land in Scottish Perthshire for £6.8 million, reports The Times.
English realtors are confident: the rise in real estate prices observed recently in the best areas of London is largely caused by Russian activity. This year, luxury real estate in London has increased by 25%.
The Times and its experts link the new expansion of Russians in the British real estate market to the political calendar. 'Apparently, Russians are being forced to think ever more seriously about Britain by the growing fog around 2008, when President Putin will step down. In what direction Russia will move after that is still unclear to them,' the newspaper writes. 'More and more Russians are deciding to buy something in the UK,' notes Rupert Sweeting from Knight Frank, 'because it is unclear who will replace Vladimir Putin.'
Experts interviewed by Nezavisimaya Gazeta link the growing demand for English real estate from Russians not only to political risks and instability, but also to the desire of Russian entrepreneurs to give their children education and business skills in the UK. According to Yegor Shishkovsky, director of the British consulting company LondonDom.com, 'the idea of a fallback airfield in case of political instability in Russia is important, but not the only motive.' Specialists believe that London attracts Russian businessmen with its liberalism, anonymity and safety.
In October 2006, the average cost of a London apartment was $628,000, and a detached house was $1.3 million. Prices in areas favored by buyers from Russia are even higher. In the Royal Borough of Kensington and Chelsea (which includes Knightsbridge and Belgravia), the most expensive in London, the average cost of an apartment is $1.6 million, and a detached house is an incredible $10.7 million.