Who Owns London? (Pt III)

Q: Who bought the most expensive homes in London last year? A: Less Russians, more Chinese, a few Brits. Greyhawk’s annual analysis reveals how new laws may be driving change.

In 2022, the UK government introduced legislation to curb the attraction of the UK property market for dirty money. Rushed through in the wake of Russia’s invasion of Ukraine, the Economic Crime Act was intended to make Britain less welcoming to “corrupt elites” and to Russian elites in particular. That aim appears to have been met: none of fifty most expensive homes bought in 2023 belongs to someone using a Russian passport.

This is in marked contrast with 2021. In the build-up to Russia’s invasion of Ukraine, Russians buying £20m+ homes included assorted arms-makers, oilmen and their children.

In the latest data, no one foreign nationality dominates. There are more Chinese and Hong Kong buyers than any other, but only six in total. The rest are a mixed bunch: they include an Indian who owns a chain of hospitals, a Pakistani construction boss, and the niece of one of France’s richest men. British buyers also make the list, mainly hedge fund and private equity types.

During 2023, five properties over £10m changed hands in a single street in Chelsea. Meeting at the Neighbourhood Watch committee will be an oil trader, a private equity superstar, his hedge fund equivalent, and a pillar of Abu Dhabi Plc.

The biggest shift for 2023 is this: only nine of the top 50 properties bought during the year are owned through companies. The 2022 Act obliges property-owning companies to disclose their beneficial owners, removing the anonymity previously enjoyed by those using special purpose vehicles. These were typically incorporated in the British Virgin Islands or other secrecy jurisdiction. The legislation appears to have greatly reduced the appeal of using such companies: 41 of the 50 properties bought in 2023 are owned “directly”. As a result, the owner’s name is readily available to any member of the public willing to pay a modest fee to the Land Registry. Overall, transparency has improved.

Wrinkles remain. A Swiss company that bought a £13m flat in Mayfair trumpets that “all beneficial owners have been identified”, but offers up the names of a Swiss lawyer and Liechtenstein trustee, thereby concealing the true owner – a Czech lottery tycoon, according to the clues that the nominees have left.

A Jersey company that bought a £23m house in Kensington has declared its beneficial owners to the UK authorities, but received permission to withhold the names from the public register. The 2022 Act allows this for those “at serious risk of violence or intimidation”. One can only guess what the video game developer who lies behind the company is fearful of.

Two properties – a £28m townhouse off Ladbroke Grove that merits an estate agent’s label of “delightful” and another worth £30m round the corner – are owned by law firms. These company owners have not disclosed their UBOs, as the legislation would appear to intend. Rather, they state only that the respective law firm partners have “significant control”. In time, the real owners will leave sufficient traces such that their identities can be found with a little sleuthing by those equipped with the right tools. For now, they are hidden.

Are these law firms using a legitimate loophole, or risking non-compliance with the legislation? We shall return to the subject in the coming weeks.

The top 50 properties have a combined value of over £1 billion. Only three were not in London (two in Surrey, one in Bath). Nothing in Scotland would have made the list. The cheapest London home was £16.5m. The most expensive was £63m, bought by the wife of a Swiss tech billionaire. (He reportedly dropped out of university to go surfing; there is hope for the rest of us).

Finally, two Russians do make the list, in a roundabout way. The daughter of a Russian banker bagged herself a £34m house in Surrey, but using a Cypriot passport (additional cost €300k, no longer available). And the Russia-born wife of a Monaco-based Austrian was the fifth buyer in that popular Chelsea street. There are no easy clues to the source of her wealth. Perhaps the Neighbourhood Watch will look into it.

A note on methodology, data and a few caveats. Our information was obtained from HM Land Registry and covers England and Wales only. We excluded commercial property. Properties bought in late 2023 may not yet be registered. Properties owned by offshore companies that were transferred through the buying and selling of the company may not be captured by HM Land Registry. None of the property owners referenced were contacted for comment and no wrongdoing by them, or their advisors, is implied.