Russians eye up London mansions – but what might they come back to?

The UK government is sitting on around £1.1bn of sanctioned London housing stock from Russians accused of corruption or Kremlin links.

Many Russians have withdrawn from new purchases in the capital due to the difficulty of getting a mortgage.

There are still Russians who own property, and live, in London, but – and this is particularly true for estate agents – there are noticeably fewer than there were in January 2022.

Before sanctions were put on Russian individuals and assets by the UK government in February 2022, Russians were major players in the super-prime game, owning huge amounts of London residential property, according to Beauchamp Estates.

“[If sanctions are lifted], we’re in a whole new ballgame again,” estate agent Paul Finch said.

With talks between Russia and the US making headlines across the world, and US President Donald Trump reportedly very anxious to broker a peace settlement, are Russian buyers about to return to the UK capital?

“[Russians] prefer London because of the cultural side of things. I think they love the ballet, they love the opera, they love the restaurants, they love the clubs, the members clubs, the architecture, everything about London,” Wetherell said.

“So I think, yeah, we’ll see them coming.”

Home sweet home

There are two reasons someone might want to buy property in London: to live or to invest (or maybe both).

Let’s start with individuals who might want to return to the capital to live.

A number of Russians have, so far, migrated from London to places like Dubai or the UAE – estate agent Paul Finch says Dubai is “packed” with Russians, but “they’ve always had an affection for London.”

“I think we’ll see some of the Russians coming back [if the war ends]… They all want to be in London,” Wetherall said.

Higher demand for super-prime properties would likely help to prop up a flagging market: During the first quarter of 2025, only 15.8 per cent of prime London properties had found a buyer marking a 3.9 per cent reduction on the previous quarter, according to Benham and Reeves.

The average property in prime central London is 21.2 per cent lower than its peak in June 2014 – a saving of £1.2m on the average prime central London property, which is currently worth £4.6m, according to Savills.

Values fell by 2.6 per cent in the year to the end of June, historic discounts equivalent to those seen in the early 1990s and in the immediate aftermath of the financial crisis, Savills added.

The real end of ‘ghost streets’?

While many Russians came to London to live and raise their children, a significant number owned houses on ‘ghost streets’, where owners of houses would only occasionally reside at the property. 

Transparency International, an organisation that investigates corruption, has previously branded Britain as a “laundromat” for suspicious wealth from Russia.

In 2022, the organisation estimated that £1.5bn worth of property was bought by Russians accused of corruption or Kremlin links.

“These figures highlight Britain’s continued role as a global hub for suspicious and illicit wealth, from Russia and elsewhere,” Transparency International said.

In 2022, the Government froze the assets of those accused of corruption or links with the Kremlin, hoovering up a lot of those houses – many of which have sat empty ever since.

“The majority of Russians that were here who own property here… stayed here [but] there have been quite a few houses that sat empty,” Wetherell said.

“One would hope that as soon as sanctions are lifted, these restrictions will be lifted as well, and these people will be able to either sell their assets or come back and sort of live in them.

“Kind of quite what state they’ll be in… we don’t know,” he added.

“They’ve been… with the shutters down for nearly three years with weeds growing out of the gutters because they’re not being serviced,” Finch said.

With the famously tough Baroness Hodge appointed as the UK’s anti-corruption champion, the capital is a less appealing environment for illicit wealth, making it more likely that these houses will simply return to the main market.

Transparency International UK has called Hodge “uniquely positioned” to make the UK “the anti-corruption capital of the world”.

Is London still a good place to invest?

There is also legitimate investment from Russian buyers in the capital, but it’s possible that this will be limited by high taxes going forward.

“The whole dynamic of the top end of the market has changed… People aren’t dipping in, dipping out. They’re buying for generations,” Finch said.

“If you want to be in London, it’s like [joining] a club. There’s a joining fee, and then, fantastic,” he added. “The joining fee at the moment for the prime end is pretty significant.”

Many of the reasons for this stem from changes announced in last year’s Autumn budget.

Policy changes announced in the budget include Labour’s decision to continue with Jeremy Hunt’s scrapping of the non-dom regime, higher VAT on private schools, and higher taxes on second homes.

Stamp duty on a £20m super-prime home is just under 12 per cent for the portion above £1.5m, amounting to around £2.3m – equivalent to years of renting a super-prime property.

“The abolition of the non-doms tax regime and imposition of an increased stamp duty surcharge on additional homes sits firmly behind a further easing in prices in central London,” Lucian Cook, head of residential research at Savills, said.

Interest rates, too, plus council taxes and changes to VAT rules, have pushed and will push the cost of buying even higher.

“It looks like we’re saying to [potential buyers], ‘Go away and go elsewhere’,” Finch said.

Changing tides?

Significant geopolitical tensions between major global players mean that nothing is set in stone.

Jeremy Gee, managing director of Beauchamp Estates, said that London prime property benefits from being “stable” compared to other areas, regardless of the ‘joining fee’.

“We have continued to see a significant inflow of international buyers into London, dominated by US dollar-based buyers from American, Middle East and Indians based in the UAE… over recent months we have seen an upturn in buyers from continental Europe and Asia.” 

An inflow of Russian buyers – even if they are buying to live rather than invest – might even boost demand enough to prop up prices.

Ultimately, Wetherell doesn’t think enough has changed in the last three years to push legitimate Russian buyers out of London – in fact, he thinks Russian buyers will even look in the same areas of the capital.

“They will start buying up… good quality prime central London stock… good quality prime Surrey stock in Wentworth estates and Georges Hill, which they pretty much made their own 10 to 15 years ago. I think they’ll come back to that,” Wetherell said.

“[Anecdotally] they do want to come back. They do want London. So yes… there will definitely be a marketplace for them.

“And I think we will see them. We will see them as and when the political landscape changes.”