Estate agent laments change in attitudes to Russian investors

 

It is no longer news to say that London's property market has cooled significantly in recent months. Prices lag behind most other UK cities, while fears remain over the impact Brexit will have on the capital as a global centre of finance and business.

However, the international property investment scene is not just about Brexit. London has been a popular investment spot for Asian and Russian investors in the last couple of decades. However, the latter group appear to be feeling somewhat unwelcome in the present tense diplomatic and political climate. 

From the row over responsibility for the poisoning of former spy Sergei Skripal and his daughter Yulia to the government's refusal to grant Roman Abramovic a new visa, the days of oligarchs finding a safe haven in London seem to be over.

Speaking to the Financial Times, estate agent Gary Hersham of Beauchamp Estates said the Abramovic affair in particular has created a sense that Russians and their money - now the subject of widespread suspicion - are unwelcome. 

He said the Chelsea Football Club owner's situation is "much worse than you understand", since Abramovic is "probably as white and clear and as straightforward as you're going to get in terms of that circle". Mr Hersham said this has created the sense among potential Russian buyers that, if he is going to be targeted, the prospects for everyone else are worse. 

The estate agent did express optimism that the situation will settle down, but he said the current political climate has brought a wider hostility to foreign money that may curb foreign investment.

Of course, if this does happen, that may create new opportunities for British investors in London, not least as price inflation will be low. While that may create some relative bargains, however, it will also mean investments will take longer to produce strong returns. 

As for Mr Abramovic and his best-known investment, he has now put the planned £1 billion expansion of Chelsea's Stamford Bridge Stadium on hold while his visa situation is worked out. 

Indeed, it may be that if he cannot resolve the matter, the biggest symbol of a Russian withdrawal from London will be the sale of an institution that owes so much of its recent success to the largesse of one of the world's richest men.