London remains world's safest place for oligarchs

London's elite real estate reached another maximum level in September.  The average price on a real estate object in the British capital hit the level of 3.968 million pounds sterling. This is 4.5% higher than before the crisis in March 2008. Houses and apartments in London became 11.4% more expensive within a year.  

In comparison with March 2009, the prices have grown by 37.2%. London remains the only territory in the country where prices continue to grow. Moreover, according to PropertyWire, the contrast between the market situation in the British capital and other regions of the country has been strengthening recently.

The average cost of the houses in England and Wales made up 162,347 pounds, which was 2.6% lower than in July. The growth of prices on real estate in London made up the average of 2.1%. However, the sales of houses priced over 1 million pounds reduced in the country by 28 percent.

The growth of prices in London, which shows the opposite British dynamics, can be explained with the demand on the part of foreign customers. They conclude 55% of luxury real estate deals, Bloomberg reports. The index made up 49% a year before.

The number of wealthy buyers from Russia has been growing steadily. As many as 6.3% deals with real estate in the center of London were concluded with customers from Russia. The buyers from the United Arab Emirates and the USA purchased a lot less - 4.7% and 3.9% real estate deals respectively, Knight Frank said.

A Russian customer made the most expensive purchase of the year. A person, whose name has not been exposed yet, bought a 300-year-old Park Place estate on the outskirts of London. The person paid 140 million pounds for the estate and 200 acres of land.

A research by Blackwood said that the volume of real estate transactions priced over 2 million pounds increased by nearly 100% from April 2010 to April 2011. There were 141 transactions registered in this segment of the market in April of the current year.

London experts say that wealthy individuals invest in London real estate just because England is the safest place in the world. There is no threat of state coups in the country, no threat of political instability and no risk of expropriation of property.

The sales of elite houses in the USA have also been growing. The sales of mansions with price tags of over $20 million have been growing at the expense of buyers from Russia, China, Brazil and India. The growth of such sales is registered in Florida, California and New York.

Boris Yaremenko.

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Author`s name Dmitry Sudakov