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Russians Inflating London Property Prices


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http://observer.guardian.co.uk/comment/sto...1922786,00.html

The Russians are here already. Damn

Cristina Odone

Sunday October 15, 2006

The Observer

Throughout the day, as I work, I check my inbox for my 'prime location property alert'. That means the property website has found a house or flat to match my request (three bedrooms and at least 1,000 sq ft for peanuts). As soon as I see it I am off, ringing the agency advertising the property, arranging a viewing. You have to move fast these days if you're going to beat the Russians....../
It is the Russians' wealth and their ever-growing numbers that inflate house prices beyond our means.
Estate agents recognise this: Ian Shelley, of an estate agency in Brompton, agrees that in swathes of London (they no longer stick to posh areas such as Belgravia or Knightsbridge), flats and houses are fetching beyond asking price, as Russians eager to begin or expand their property portfolio ignore the market rules. Indeed, Russians are such a presence that some agencies now feature a Russian page on their websites, while many are hiring Russian-speaking negotiators.../

:ph34r:

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http://observer.guardian.co.uk/comment/sto...1922786,00.html

The Russians are here already. Damn

Cristina Odone

Sunday October 15, 2006

The Observer

Throughout the day, as I work, I check my inbox for my 'prime location property alert'. That means the property website has found a house or flat to match my request (three bedrooms and at least 1,000 sq ft for peanuts). As soon as I see it I am off, ringing the agency advertising the property, arranging a viewing. You have to move fast these days if you're going to beat the Russians....../
It is the Russians' wealth and their ever-growing numbers that inflate house prices beyond our means.
Estate agents recognise this: Ian Shelley, of an estate agency in Brompton, agrees that in swathes of London (they no longer stick to posh areas such as Belgravia or Knightsbridge), flats and houses are fetching beyond asking price, as Russians eager to begin or expand their property portfolio ignore the market rules. Indeed, Russians are such a presence that some agencies now feature a Russian page on their websites, while many are hiring Russian-speaking negotiators.../

:ph34r:

Well I suppose it beats the 'welfare immigrants' (not my quote - or my opinion for that matter - but that's another story) that have been much maligned on these boards during the last week

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I've always wondered to what extent proper money laundering rules are applied to house purchases (often presumably in cash) by Russians in Kensington, Chelsea, Belgravia etc.

Its strange that under the FSA money laundering rules UK residents effectively have to be gun toting pensioners on benefits who like travelling abroad to be able to open many postal/internet building society savings accounts for only £100 but rich people from abroad appear to come in and buy homes in central London in cash with such ease!

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The Russians are here already. Damn

Cristina Odone

Sunday October 15, 2006

The Observer

Throughout the day, as I work, I check my inbox for my 'prime location property alert'. That means the property website has found a house or flat to match my request (three bedrooms and at least 1,000 sq ft for peanuts). As soon as I see it I am off, ringing the agency advertising the property, arranging a viewing. You have to move fast these days if you're going to beat the Russians....../
More evidence of the London and South East housing stock becoming a global commodity. We once had a closed market where the normal rules applied i.e if housing becomes too expensive for FTB's a correction could be expected in the short term. The really alarming comment in this report is that the Russians and others I might add are no longer focussed on central London only - they are looking at other areas in the capital and in the South East. They keep the sentiment of an ever increasing market going and with the insatiable Chinese and Indians will allow it to keep doing so into the foreseable future.
This in turn allows parents to MEW with confidence and get their offspring onto the housing ladder. IR are still historically low and employment high despite locals losing jobs at the low end due to immigration. The Eastern Europeans are flooding our universities in ever greater numbers, they are right, realising that the key to success in the UK economy is a British qualification alongside their home achieved ones. This means that the pressure on the housing stock in good areas will become ever greater as income for these newcomers rise.
I believed in a HPC to the end of 2004 - I still believe it will be conducive to a stable society for prices to decline, but its not going to happen. The largest fall we'v ever had was in the region of 33% -if this happens it will take us back to prices two years ago. Not much of a prospect to look forward to.
GET ON THE LADDER NOW.
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Thinking about it, its a bit of rough justice. The wealthy London and SE workers have been destroying communities in the West Country etc. by buying second homes, now the Russians are coming to London and pricing out the same people in their own backyard. :lol:

___________________________________________________________________________________

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I believed in a HPC to the end of 2004 - I still believe it will be conducive to a stable society for prices to decline, but its not going to happen. The largest fall we'v ever had was in the region of 33% -if this happens it will take us back to prices two years ago. Not much of a prospect to look forward to.

Not quite Jem. If house prices have risen 33% in 2 years (which they haven't) a drop of one third would be quite svere and wipe out more than just the rise of the same amount.

E.g. House in 2004 at 200k. HPI of 33% in 2 years = 266k. HPC of 33% = 266k -33% = 178k.

Thus the person who bought two years ago is in schtook a healthy 22k.

The more likely scenario is that the 200k house in 2004 has risen by about 15% making a 33% drop very painful indeed. IMO, we are going to see a lot more pain than 33% because of the level of indebtedness involved, the prospects of a full blown recession and high unemployment.

Edited by Realistbear
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I believed in a HPC to the end of 2004 - I still believe it will be conducive to a stable society for prices to decline, but its not going to happen. The largest fall we'v ever had was in the region of 33% -if this happens it will take us back to prices two years ago. Not much of a prospect to look forward to.

GET ON THE LADDER NOW.

Jem, please tell us what motivates you to be so concerned for the welfare of others?

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The Middle East oil money was the same 'problem' some time ago. I think it was one of the proposed factors for the 1980's excesses.

Forgetting the fact that it was UK population greed.

I am often told that rich folk from the SE are inflating prices in rural communities. Having looked into the bidding I found it was the locals pushing the bidding and making the final bids. :rolleyes:

A good scapegoat is always handy.

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  • 2 months later...

what checks does the uk government do to ensure that the money from russian and middle eastern oilmen is legitimate and not money laundering or the proceeds of crime or bribery? i seem to remember that there are no such checks or rules (i used to edit a magazine for wealthy international investors - things may have changed since then, but i doubt it). it just goes to show that the government's agenda lies in stoking house price inflation or at the very least propping prices up. somebody ought to start a campaign asking these very questions: checks should be conducted and if the legitimacy of the russian/middle eastern oilmen's wealth can't be satisfactorily explained, their houses should be repossessed our bought back by the government under compulsory purchase orders to be distributed to ordinary, toiling people! that'd trigger a crash all right. just the talk of it would be good.

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The Russians & Arabs have been buying these big London places up for years, famously in 'The Bishops Ave' Hampstead. I know from being involved with the security co's looking after the nearby empty properties .

Wasn't there a lot of press articles 7-9 yrs ago about the notoriously ruthless Russian / East European Mafia gangs buying up loads of uk property

http://observer.guardian.co.uk/business/st...1764383,00.html

Down on Billionaire's Row...

"During the first Gulf war, says Abrahamson, the Saudi royal family bought 10 of the street's 66 mansions, presumably as a bolthole in case they were deposed. The Saudis still own the houses. In more recent years Russian and East European 'oligarchs', keen to expatriate their billion-dollar oil and metals fortunes, have been queuing up to buy.

Many bring with them bodyguards, bullet-proof limousines and state-of-the-art security systems . 'Over 30 years I've dealt with every nationality of buyer,' says Abrahamson. 'One gentleman from Russia never leaves The Bishops Avenue. He won't even go around the corner."

They should rename Hampstead 'Russian Vasey' - You'll never leave :D

The Oligarch of Gentlemen

Edited by Saving For a Space Ship
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Jem, please tell us what motivates you to be so concerned for the welfare of others?

I am surprised to find something which I wrote many months ago being used again, but I was right and I am not gloating about it. I've predicted the last two years of price increases correctly. Reading again what I must have written near the beginning of 2006 I see no reason to change my mind, sadly. I repeat, if you want to live in London and the South East you need to be able to compete for housing with global capital. Government realises this and are trying with its various schemes to stem the market, it won't. I wish I could be more hopeful to those of you who are desperate to get on the ladder, in the UK everything is for sale and now our housing stock built up over centuries are being sold to foreigners who have no social stake in our society. I have three children in their mid teens, within the next couple of years my wife and I will have to decide whether we became one of the BTL brigade. The alternative is that our children will never be alble to afford a property. We will need to start off mortgages for them and they will take it over hopefully post university etc.

Why am I concerned about the welfare of others? I was once an economist for a major bank, I am now also a Church of England Vicar (I'm not joking). It cannot be right that younger people have to take on huge mortgages just to find a decent place to live and for their parents to have to deplete their pension funds to get them on the ladder. We are storing up a huge social cost for the future.

Jem

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Thinking about it, its a bit of rough justice. The wealthy London and SE workers have been destroying communities in the West Country etc. by buying second homes, now the Russians are coming to London and pricing out the same people in their own backyard. :lol:

Possible trigger for a collapse?? The Russians would flee like rats from a sinking ship when it goes tits up then where will we be?

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Foreigners buying up property is sure to be happening, but I think this is way down the list of reasons for the HPI of the past few years. It's all just another 'reason' given by the media to justify the insane prices that we are seeing at the moment.

I disagree with the poster that said that they will all flee when they see their 'investments' drop in value, the reason that wealthy foreigners come to the UK is the ownership rights and the laundering of their money in the investment markets of London.

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Foreigners buying up property is sure to be happening, but I think this is way down the list of reasons for the HPI of the past few years. It's all just another 'reason' given by the media to justify the insane prices that we are seeing at the moment.

I disagree with the poster that said that they will all flee when they see their 'investments' drop in value, the reason that wealthy foreigners come to the UK is the ownership rights and the laundering of their money in the investment markets of London.

Agree on both counts. These people have no impact on the wider market, and don't give a toss if prices fall, I don't think they see it as an investment, more a holiday home, or exile home. Maybe the solution is to let a few more ex-KGB into the country to season their food.

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I disagree with the poster that said that they will all flee when they see their 'investments' drop in value, the reason that wealthy foreigners come to the UK is the ownership rights and the laundering of their money in the investment markets of London.

while what you say is probably true, who can second-guess the motivations or thinking of others?

the thing that MIGHT make russians/less-salubrious foreigners think twice about buying or retaining property here is some reasonable questions being asked about how they made their money and some nasty legislation for people who didn't do it in very pleasant ways.

if the government really wanted to ``stem the tide'' in the south east (and as a consequence, national) property market, one thing it could do would be to make proper checks on the investors who want to snap up london, and to be prepared to do this retrospectively for those who already bought.

personally, that could be a vote clincher for me. for example, if the tories said they would make retrospective checks on russians (and other nationalities) who've bought here...then that would turn me far closer to them than i've been up to this point.

are you reading david cameron? no, you're probably cycling round notting hill, closely followed by your chauffeur driven merc.

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personally, that could be a vote clincher for me. for example, if the tories said they would make retrospective checks on russians (and other nationalities) who've bought here...then that would turn me far closer to them than i've been up to this point.

are you reading david cameron? no, you're probably cycling round notting hill, closely followed by your chauffeur driven merc.

Its clear that vast amounts of the money being pumped into the London property market is from the drugs trade.

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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