Wealthy Russians drive up demand for luxury real estate in London by 50%
The luxury real estate market in London is experiencing explosive growth due to demand from wealthy Russians.
In the first quarter of 2021, the number of requests to buy an apartment in the British capital from Russians with assets exceeding $30 million soared by 50%, reports the news agency RBC, citing a study by consulting firm Knight Frank.
Most of these clients "choose apartments in the elite segment for the purpose of relocating for themselves or children," notes Marina Shalayeva, regional director of Knight Frank’s department of foreign real estate and private investment. These are mainly high-budget deals beginning from 2 million pounds, Shalayeva points out.
Developers are ready for negotiations, and in some cases, it is possible to get a discount of 10-15%.
"Russians have a great interest in this market, as London has always been, is, and will be a sought-after, promising and liquid destination for both life and investment. Of course, due to Brexit, pandemics, lockdowns, we have seen a decrease in activity. But now that the situation has started to improve, ultra high-net-worth clients are again buying real estate with great interest," Shalayeva said.
Overall, at the beginning of 2021, the UK luxury real estate market has hit several records. The number of transactions in March was the highest in more than 10 years, sales in England and Wales - the highest since 1995, the number of transactions and requests for luxury housing in London - the highest in a decade.
The jump in demand has led to a shortage of supply and higher prices. Between March and April, the average cost of housing in the UK rose by 2.1%, the highest since 2004. The annual dynamics were also positive and reached 6.3%. The leader in price growth was the northwest of the UK (8.2% for the year).
Prices for luxury residential properties in central London fell by 3.5 percent in the first quarter of 2021 (but increased by 0.1 percent in the quarter), but this is the smallest negative trend since the start of the pandemic, which "indicates a gradual recovery of the market," Knight Frank notes.
In the luxury suburban housing market, prices jumped by 6.7% - the highest since the global financial crisis of 2008-09.