Russians' $10.7 billion UK property under the spotlight as London moves to stamp out dirty money

According to a survey conducted by property agent Aston Chase, Russians own about £8 billion (US$10.7) worth of property, businesses, and other assets in the UK.

It claims that £1.1 billion has been invested in London real estate.

"If the crackdown on so-called dirty money becomes severe, for example through retrospective investigation, then there will inevitably be a shift of wealth out of the UK," said Aston Chase.

According to the survey, there are currently over 150,000 Russians living in London.

According to Bloomberg, the UK has accelerated plans to combat money laundering by enacting sweeping new laws to register foreign owners of British property and expand government powers to investigate the sources of their wealth.

Prime Minister Boris Johnson announced last Thursday that he would push forward legislation on a long-stalled register of overseas property ownership, as the UK sanctioned more than 100 Russian individuals and entities as part of a coordinated push by Western countries against Russian companies and oligarchs in the aftermath of Russia's invasion of Ukraine.

Meanwhile, the United Kingdom, the European Union, the United States, and allies have agreed to bar a number of Russian banks from Swift, an international payment system used by tens of thousands of financial institutions.

The move aims to disrupt the country's banking system and access to funds via Swift, which is critical for global money transactions to run smoothly.

Russians continue to buy, but the manner in which they do so is changing.

"Where some were previously buying as cash buyers they are now arranging finance as they are worried about the UK government freezing their funds and want to stay liquid," Aston explained.

Many high-net-worth Russian families, according to Aston, already have money and assets outside of Russia.

Aston Chase recently assisted a young Russian couple in purchasing a newly constructed 6,000 square-foot Regency style townhouse mansion with four reception rooms, five bedrooms, a private cinema, gymnasium, and spacious rear garden just off Hamilton Terrace in St John's Wood for £11.5 million.

Another Russian buyer paid around £25 million for a seven-bedroom property on Hamilton Terrace, according to the report.

"In our experience, buyers from Russia are predominantly looking for houses. However, they are also prolific buyers of large lateral apartments in new developments with the amenities that high net-worth individuals have come to expect in today’s luxury London market," said Mark Pollack, co-funding director at Aston Chase.

In 2008, former Prime Minister Gordon Brown introduced the Tier 1 Investor Visa, which allowed successful applicants to reside in the UK in exchange for a £1 million investment in government bonds.

Billionaire Alisher Usmanov, who owns Beechwood House off Hampstead Lane, is one of the wealthiest Russians in North West London.

With a net worth of US$6.4 billion, Andrey Guryev is rumored to be the owner of Witanhurst Mansion in Highgate, the second largest private residence in the United Kingdom after Buckingham Palace.

By fLEXI tEAM