Luxury properties in Chester Square in London, where a number of Russians have invested. Pressure is on the UK to seize these properties, but this seems unlikely. (Photo by Richard Baker/In Pictures via Getty Images)

A spree of have suggested that Russian elites may soon sell their UK properties, en masse, due to fast-growing anti-Russian policy and rhetoric triggered by Moscow鈥檚 ongoing invasion of Ukraine. 

The unprecedented slew of 鈥榃estern鈥� sanctions have, to a very high degree, cut the Russian economy from the global economy, reducing Russians鈥� liquidity and increasing fears that their assets might be frozen. As a result, there have been rumours that the UK may soon see wealthy Russians flee the property market in a panic, not least since Westminster announced of sanctioned Russian oligarchs and reveal opaque holdings .  

Thus far, the highest-profile rumoured seller is the billionaire owner of Chelsea F.C., Roman Abramovich, is looking for buyers for his 拢150m Kensington mansion and Chelsea flat. 

Over the past 15 years, Russian elites such as Abramovich have been among the most active at the top end of the UK property market, with an overwhelming focus in or around London. 

Russians are deeply embedded in the UK 

Russians own worth of property, businesses and other assets in the UK, 拢1.1bn of which is in homes, spread across some 150,000 Russian owners. The richest of these reside, invariably, across Belgravia, Knightsbridge, Chelsea, Hampstead and Highgate.

Although two high-profile Russian purchases in Marylebone and Regent鈥檚 Park fell through in recent days, there are no signs of an owner or buyer exodus.

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鈥淒espite the Russian-Ukraine crisis and sanctions, none of my Russian clients 鈥� who are among the top five buyers by country of origin in purchasing London homes valued at more than 拢10m 鈥� have asked me to sell their properties in London or the Home Counties,鈥� says Gary Hersham, founding director of Beauchamp Estates. 

鈥淧eople 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 [with money that] is totally legitimate.鈥�

Hersham says that his Russian clients are still looking to buy property in London, such as one 拢15m purchase in central London that he is finalising. 

鈥淏ut all the media headlines and government announcements are making my Russian clients want to keep an extremely low profile at present,” he says. “For property tours, for example, they are first sending a representative so that the purchase doesn鈥檛 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 鈥� but when their children and grandchildren live here, why would they?鈥�

Seizing oligarchs鈥� homes is no easy feat

Hersham also balks at the idea that the UK government will be able to sweep in and seize dozens of homes from Russian oligarchs. 

If the British government wishes to seize a mansion, townhouse or penthouse in London from a Russian owner, it will first be required by law to issue them with an ‘unexplained wealth order’ 鈥� which is issued by a court on behalf of HM Revenue and Customs.

The owner then has to provide the court with evidence that proves that the property was acquired using legitimate funds. Only if the court is not provided with legal paperwork can the government then seize the property, explains Hersham. 

Only nine unexplained wealth orders have ever been issued 鈥� and only four have actually been successful in the courts in proving that the properties were obtained using monies for which there was no satisfactory paperwork.

In short, if the UK government wishes to seize Russian real estate, the court first needs to be convinced that there is a good possibility of the case being successful; more specifically, that the owner does not have the legal paperwork to prove the legitimacy of the property purchase.

It remains to be seen, however, whether new government legislation will give the aforementioned process more, or special, teeth in light of the Ukraine invasion. In any case, since much of Russia鈥檚 elite (oligarchic or not) is so deeply embedded in London, a grand exodus does not seem likely any time soon.聽

More coverage of the Ukraine invasion from 51爆料 Monitor: