Lower oil prices, falling rouble have greatly reduced Russian buying power
Having enough money to buy a house in Pimlico, Clapham or Islington might fit the definition of affluence for most people. However, for rich Russians, having to resort to house hunting in zone 2 of the capital is dangerously close to slumming it.
Research shows, however, that the impact of lower oil prices and the falling value of the rouble has greatly reduced Russian buying power. Hamptons International said that Russian buyers accounted for 1% of house purchases in top-end boroughs, such as Kensington and Chelsea last year, compared with 6% in 2014. Their share of the housing market in inner-London areas such as Pimlico and Clapham has risen from 2% to 11%.
Fionnuala Earley, research director at Hamptons, said that sanctions on Russia and the rout in the global oil markets had especially hurt the oligarchs. “The rouble in particular has depreciated rapidly against sterling, meaning that UK property is now almost twice as expensive for Russians to buy as it was at the start of 2014,” she said.
This article originally appeared on The Times of London.
Source: Mansion Global By: Deirdre Hipwell
Photo: UNITED KINGDOM SOTHEBY'S INTERNATIONAL REALTY