Talking Heads: On Russia sanctions & the London property market

Two weeks on, we asked prime property insiders – including those who specialise in Russian clients – about what effect anti-war sanctions are really having on the London property market, and how their businesses are being affected…

It’s been two weeks since the UK, EU, US and many other nations imposed a first tranche of economic sanctions against Russia, in response to the harrowing invasion of Ukraine.

Sanctions have since been significantly ratcheted up – and are likely to go further as the war continues. Super-rich individuals, banks and other Russian businesses have been targeted in an effort to stop the Kremlin’s aggression.

European Union countries have already seized yachts and other assets belonging to oligarchs with ties to Vladimir Putin, while the British government is fast-tracking long-overdue legislation to draw back the curtain on super-prime property ownership, and potentially allow the seizure of Russian-owned homes in the UK.

Many multinational brands – including real estate consultancies Knight Frank and Savills – have gone further than current sanctions, suspending business operations and severing ties with Moscow.

Understandably, Russian-owned mansions and penthouses in London are attracting a lot of interest from sanction-makers and the media. We’ve heard rumours of high-profile Russians looking to urgently offload homes here – but what’s actually happening on the ground in the Golden Postcodes?

We asked prime property insiders in London – including those who specialise in Russian clients – about what effect sanctions are really having on the London property market, and how their businesses are being affected…

Ordinary Russians are being swept by the same broom

Alisa Zotimova, Founder and CEO of AZ Real Estate

“Definitely, our business has been affected and not positively. Part of the problem is that the sanctions imposed on Russia by the UK government are not very specific. Apart from sanctions on billionaires and officials close to Putin who we never worked with anyway through all 10 years of operating, ordinary Russians are being swept by the same broom, too, unfortunately. There have been talks by Boris Johnson and Priti Patel about limiting the size of bank deposits for ‘rich’ Russians but there are still no procedures in place to clarify the exact measures and for some reason a savings of over 50 000 GBP for some reason is noted as the benchmark of being ‘rich’.

“For example, we had a search client who’d settled on buying a two-bedroom flat for her family for £825,000. They had been living and renting in the UK for three years and decided to get on the property ladder. But now the deal has fallen apart because the mortgage deposit they were going to use is stuck in the Russian VTB bank which is under sanctions. Hardly an oligarch’s level or enough to buy a McMansion, isn’t it? Our largest property search instruction now is around £2.5mn, we carry out AML checks on clients as before and are trying to stay focused.

“As we deal with commercial property as well, we had a really cool clothing brand which was planning on opening their branch in the UK but they switched their expansion to Dubai now. And a hospitality brand who was going to open a new restaurant in London but now the plans are on hold.

“As for the selling, we do have some Russian sellers, but their properties had already been on the market before the 24th of February. Most of our sellers have been living in the UK for a long time and now are sticking to their guns with their instructions.

“We do not solely have Russian-speaking business and have some Property Management income, too, but the future is unclear and I am looking at efficiencies and alternative income streams as any business owner would.

“Lastly, it’s been a very emotional and psychologically difficult time for our team. We have an international team with Ukrainians, Russians and Belorussians. We have friends, relatives and business partners in these countries. We all feel for and support each other, condemn the war and hope that it will stop soon.”

London-based Russian national Alisa Zotimova founded property consultancy AZ Real Estate in 2012, having previously worked for Cushman & Wakefield and Jones Lang LaSalle in Russia and the UK. 


Nothing suggests there’s a massive offload by ordinary Russians

Igor Griskin, founder of Griskin

“I think ordinary Russians are just waiting to see where this goes. I’ve been speaking to other big agents as well but nothing suggests there’s a massive offload.

“I think those who are sanctioned or those who associated with them will offload if they can. An issue for those individuals is to find someone who actually willing to facilitate it. For any bigger brand there’s just too much negative publicity.

“I genuinely don’t think it will massively impact PCL market. Across the town there a lot of hot buyers looking for those ‘bloody’ opportunities. Yesterday I spoke to a few ordinary Russians and given huge economical sanctions, it looks like better off to hold your asset here if you can.”

Former Foxtons man Igor Griskin launched an eponymous London buying agency specialising in high net worth Russian-speaking clients last year.


Russians leaving the UK property market would have no impact whatsoever

Edward Heaton, Founder and Managing Partner of national buying agents, Heaton & Partners

“Russians leaving the UK property market would have no impact whatsoever. Whilst Russians have bought a significant amount of property over the past few decades, they are now such a small minority of buyers. And in the world of super-prime London it’s a very big place and there are an awful lot of wealthy individuals from around the globe who want to park a proportion of their cash in London property. Indeed, countries like Brazil, India and China have plenty of billionaires with money burning holes in their pockets.”

Ed Heaton set up national buying agency Heaton & Partners in 2013, having previously worked at Property Vision, Savills and Beauchamp Estates. The firm now has a network of agents covering London and southern England.


People are less concerned about buying or selling property and are understandably more consumed about the tragic events unfolding in Europe

Mark Pollack, Co-founding Director at Aston Chase

“It feels uncomfortable to be talking about ‘the state of the property market’ while people are tragically losing their lives and being injured but I do recognise that it is a subject that is attracting a huge amount of attention.

“In reality it is still too early to judge what effect the sanctions are having or may yet have on the London property market, but the knee jerk reaction seems to be that people are pausing in order to wait and see how things play out.

“However, one of the immediate implications has been that anyone of Russian nationality (irrespective of whether they have British citizenship or citizenship from any other country) are unwilling to make a commitment to purchasing a home because they are understandably wary of blanket sanctions affecting them in some way.

“It is inevitable that with such current uncertainty, people would want to remain liquid.

“We have heard of a couple of instances where Russians were rumoured to be trying to sell property on the grey market, however, from initially expressing a desire to sell, these vendors have since stopped the process as it has become increasingly apparent that they don’t have a safe place to put the money.

“There may well be an underlying desire still to sell these properties, but whether that can be realised remains to be seen.

“We have had deals fall through at Aston Chase because of the sanctions; whether these deals are lost or just paused is unclear. If this is going to be a long-haul war the likelihood is that these deals will prove to be abortive but if the war were to end quickly or diplomatically (which sadly right now looks highly improbable) they ‘may’ be resurrected but instinctively, I would say this is looking increasingly unlikely.

“There is no saying what the terrain may look like when this war ends… again it is too early to comment on what ‘the new normal’ will prove to be.

“This war is causing disruption across the world, both humanitarian and economic, which will undoubtedly have long lasting effects. I do not, however, believe that it will result in a significant collapse of the London residential market. The market in London is extremely resilient with a lot of new wealth, particularly from other international regions, still very interested in owning property here.  If Russians do move out of London this will open opportunities for other buyers particularly as we currently have an acute shortage of prime inventory.

“The people who are in the market at the moment are clearly very serious and have specific reasons for needing to move within a given time frame so those deals will continue irrespective.

“Having said that, most people are not surprisingly distracted by current events and are less concerned about buying or selling property and are understandably more consumed about the tragic events unfolding in Europe.”

Mark Pollack co-founded super-prime London estate agency Aston Chase in 1985. The firm covers North West and Central London from its office near Regent’s Park.


There seem to be a surprising number of opportunistic ‘vulture’ buyers soaring and circling as events unfold

Charlie Willis, CEO of The London Broker

“The reaction to what is happening in Ukraine in the prime property market is varied; going from a client sending me a fearful WhatsApp, ‘Chali, what going to happen with the property market if there is a nuclear war 😢’ – to the other extreme of a more opportunistic approach at the expected expense of Russian oligarchs being placed on sanctions, ‘I am ready to jump in where anyone has to sell quickly, just tell me.’  Indeed, those opportunists are looking not just in prime London but are ‘ready to pounce’ in Wentworth and St George’s Hill too, where Russian communities are known. In past markets, these buyers are typically referred to as ‘vultures’ and there seem to be a surprising number soaring and circling today as events unfold.

“Wise clients keep a cool head, knowing that property investments are best made taking a longer term approach.  My financial adviser keeps telling me not to make any knee-jerk reactions and that history dictates that ‘life goes on’.  Indeed, this Cabot Wealth article is compelling and reassuring.

“This week I have been speaking to a number of Ukrainian and Russian clients and all are appalled by what is happening, without exception.  However none of them have said that they must sell immediately.  As an estate agent we have been told to ensure we redouble our anti-money laundering legal requirements and check the names on the extended and updated sanctions list.  I am pleased to say that none of my clients are on it!

“My advice to clients is indeed to currently keep to the plan of launching a property into the spring market, just around the corner, if that was always the plan.  Our truly international buyer base in London ebbs and flows according to booms and busts in different global jurisdictions but in general retains its steady long term growth here. London’s safe haven status and democratic freedoms still attracts global wealth.

“There is no doubt that some vendors will be less committed with their selling plans as long as Putin’s War rumbles on and so I suspect that yet more listings will be held ‘off-market’. A prevalent strategy due to the inflexibility of changing tactics quickly in the online world of unforgiving portal history.

“However horrendous the unfolding events are in Ukraine and the human tragedies that grip and scare us from afar, we will all be hoping resolve is not too far distant so we can get back to re-building our post-Covid society and return business to some form of normal.”

Charlie Willis is CEO of The London Broker, a collective of luxury property agents that launched in 2019. He was previously an equity partner at Strutt & Parker.


We may actually see an increase in Russian ownership

Marc von Grundherr, Director of Benham and Reeves

“The general expectation is that there may be a surge in Russian-owned prime London homes entering the market over the coming weeks as recently implemented sanctions start to hit home. However, this simply isn’t something we are seeing at present.

“It is early days and hopes that a resolution may be found soon are no doubt contributing to a degree of hesitation, however, the likelihood is that we may actually see an increase in Russian ownership should the current landscape remain.

“The London market has always been a safe haven in times of crisis and with the Russian economy in disarray, what better investment to make than a tangible asset that can not only act as a destination of refuge, but is sure to hold it’s value in the long-term?”

Estate agency Benham & Reeves operates 19 branches across London, as well as eight international offices (China, Hong Kong, India, Malaysia, Middle East, Singapore and South Africa). 


We could well see an oversupply of stock hitting the market in areas such as Knightsbridge, Belgravia and St Georges Hill in Surrey

Geoff Garrett, Director of Henry Dannell

“Where the super-prime market is concerned, the vast majority of Russian properties are owned via shell companies which often originate in, shall we say, edgy jurisdictions. It certainly looks as though the government has set its sights on eradicating these entities and anyone involved in helping them shelter assets.

“So while the market is unlikely to see an influx of homes from the legitimate Russian homeowner, we’re already seeing signs of movement from those at the very top tier of the market who are clearly frightened about having their assets seized.

“We have seen news of extremely high profile individuals looking to sell UK assets in haste which tells its own story. As a result, we could well see an oversupply of stock hitting the market in areas such as Knightsbridge, Belgravia and St Georges Hill in Surrey.

“This influx of stock is likely to depress prices in what are otherwise exclusive enclaves but, of course, professional advisors, trustees, nominees and directors of holding companies, will be nervous by association.

“It is a potentially fascinating position but will essentially affect micro-markets within London. However, the downward pressure on prices should be limited as agents are currently crying out for stock which is scarce at present, so it probably balances the buyers and sellers in the aforementioned areas to a more normalised level.”

Henry Dannell is a specialist mortgage broker for private clients and high net worth individuals. It was co-founded by Geoff Garrett in 2019.


None of my Russian clients have asked me to sell their properties in London or the Home Counties

Gary Hersham, Founding Partner at Beauchamp Estates

“Despite the Russian/Ukraine crisis and Sanctions, none of my Russian clients – who are amongst the top five buyers by country of origin in purchasing London homes valued at over £10 million in London – have asked me to sell their properties in London or the Home Counties. Indeed the younger generation of Russians, these are the children of the principals, are not worried about the sanctions as many have British passports, the have long established Trust-funds in UK banks, and their money is totally legitimate.

“People forget just how embedded Russian investment is in London, Russians have been buying property in the capital since 2008 and many have children and relatives who have come for schooling here, and now live here as British citizens. Our Russian clients indeed are still buying property in London, we are just finalising the purchase of a £15 million mansion for a Russian client in Prime Central London in one of the best addresses.

“But what all the media headlines and Government/MP announcements are doing, is making my Russian clients wanting to keep an extremely low profile at present. So they are not seeking to draw attention to themselves and indeed for property tours they are first sending a “representative” so that the purchase doesn’t draw attention personally to them. If sanctions and pressure get more serious, then it is possible that we may see some Russians deciding to sell their London homes, but when their children and grandchildren live here, why would they?

“Our Russian clients do not like the current Crisis, the Sanctions and the Spotlight being shone on them by politicans, however Russian investment in UK real estate and Russian UK homeowners are very embedded in British life. The children have gone to school here, the grandchildren as well. The wives or girlfriends love being able to shop in Harrods and the boutiques of Bond Street and Sloane Street. So despite all the pressures, they don’t want to give up their London homes.”

Read Gary Hersham’s full opinion piece, published earlier this week in PrimeResi, here.