FT: Russian raise property prices in the UK

FT: Russian raise property prices in the UK

The invasion of the Russians, led by the most prominent of them Roman Abramovich on the British housing market was the subject of headlines of British newspapers. Week does not pass without some billionaire bought a house worth millions in Chelsea, Mayfair and Knightsbridge, said in a Financial Times article, the translation of which is published Inopressa.ru.

Russian money to maintain high prices in the London housing market. Many believe that the Russian billionaires get new addresses, to look to British commerce.

“Intuition tells us that they will invest in real estate because it will start to understand the basics of British commercial market” – said Chris Bell, general manager of the European branch of Knight Frank.

Owner Gary Beauchamp Estates Hershem believes that Russian will go the same way as the old pilgrims on the British market. “Like the Middle Eastern investors, the Russians will start with housing, then begin to invest in housing, and later switch to a minor, and then major commercial investment.”

However, given that the Moscow office market makes a profit of about 15%, it is difficult to understand why the Russians should be concerned more tranquil British market with the profitability of 5%.

“Its about safety, – said partner Knight Frank Jeremy Waters. – There will be a tenant they have at least 10 years, they can every five years to raise a fee, and it does not roll down. London allows a balanced portfolio and offset the risk that they are at home. ”

Political upheavals like the recent dismissal of the government by President Putin also stimulate investment outside Russia, said Hershem.

The prospect of an influx of new money has caused a revival of investment companies have formed a partnership in Moscow.

“We have opened offices in Russia, because we know that this will be a big market, and we see the potential of Russian money coming to Britain. We go to Russia to understand the market,” – says Waters.

Natasha Reteyum, development director of the Moscow office of Knight Frank, said that even if Russian money to be able to get to say who and where to invest, it will be difficult, as many investors do not like to talk about where they invest.

According to her, the typical tendency for Russians to keep secrets concerning the business, even intensified after the arrest of Mikhail Khodorkovsky.

The desire for secrecy, combined with the increase of Russian investments in the real estate market, however, is cause for concern in relation to money laundering. Investing in real estate – its an easy way to launder “dirty” money, as commercial property in a law-abiding economy provides net revenues, which can be sold in the future and get a legitimate profit.

This process has not escaped the attention of the Russian authorities. Deputy Finance Minister Viktor Zubkov, head of the Committee for Financial Monitoring, stepping up efforts to combat money laundering, reaching agreements on cooperation and exchange of information with the European governments.

Zubkov said: “If you suspect that a property purchased on” dirty “money, we will work with the information received from our colleagues. And if, for example, we receive a request from the British Financial Services Authority, of course, we will start your own financial investigation.”

Combating money laundering is enhanced with the entry into force in March, the law on money laundering in 2003.

Today agents may face imprisonment or fines if they help clients launder money.

However, Waters says that agents can take steps to protect themselves. “We need to ask as many questions. If funding is causing your anxiety, talk with bankers and other sources in the financial community. Ensure that clients have the lawyers and agents authorized to make transactions on their behalf.”

Despite the concerns about money laundering, many in the industry expect the arrival of Russian.