Overseas property investors have long seen London as a safe haven thanks to the UK’s transparent legal system and strong tradition of rule of law. That helps explain why Benham and Reeves believes there could be a rise in the number of Russian people buying homes in capital this year.

Russia’s economy is expected to plunge into a deep recession as a result of western sanctions and the country’s increasing isolation after invading Ukraine.

Economists said measures imposed on Russian banks and companies by the US, EU, UK and their allies were having a major impact on financial markets in Russia and would damage the country’s wider economy over time.

The director of Benham and Reeves, Marc von Grundherr, commented: “The London market has always been a safe haven in times of crisis and with many looking to flee a free falling Russian economy, there’s a very good chance London will be their destination of choice.”

The latest property market analysis by Benham and Reeves, has revealed that Russian residential property purchases contributed an estimated £190m in market value and £13.2m in stamp duty tax in 2021.

Some 82,305 residential property sales took place across the London market last year to the tune of £55.7bn in market value, while homebuyers paid out £3.7bn in stamp duty tax.

In addition to these primary purchases, a further 13,016 transactions took place for additional purchases such as second homes and buy-to-let investments.

It is thought that approximately 30% of this market activity was attributed to international buyers, with Russian buyers accounting for 1% of all market activity.

This means that Russian buyers accounted for an estimated 247 primary residential property purchase across the London market in 2021, with a total market value of £167m, paying just over £11m in stamp duty tax in the process.

Benham and Reeves also estimates that Russian buyers accounted for approximately 39 transactions of second homes at a market value of £22.8m, paying £2.2m in stamp duty tax at the higher rate for this type of purchase.

In total, Benham and Reeves estimates that 286 London properties were sold to Russian buyers in 2021, sitting just shy of £190m in market value and netting the government almost £13.3m in stamp duty tax.

von Grundherr said: “Russian activity has long contributed to the overall health of the London property market, with might of the Ruble traditionally prevalent within prime London neighbourhoods.

“However, Russian buyer activity still only accounts for a very marginal proportion of market activity and so while the swift implementation of economic sanctions against Russia may have a knock on effect here in the capital, they certainly won’t spur a market decline of any sorts.

“In fact, while the expectation is that this segment of international buyers will now dwindle as assets are frozen and the Iron Curtain falls once again, the likelihood is that we may actually see an increase in Russian ownership.”

Data sourced from the Land Registry Price Paid: 

Foreign owners of UK properties to be identified in new register