New data on London’s property market has raised fresh alarms over a surge in purchases of homes valued above £1 million, with more than 30% of transactions involving foreign nationals, offshore entities, and opaque structures.
At least 9% of these deals since early 2022 have been linked to Russian citizens, according to Andrey Istevich, director of the Institute for Research and Development in Eastern Europe.
Speaking to analysts reviewing 2026 market research, Istevich highlighted how Russian multimillionaires, organised crime figures, and corrupt officials persist in funneling vast sums into London’s residential prime properties, despite escalating Western sanctions. “These buyers are undeterred,” he noted. “The vast majority of transactions route through shell companies in offshore havens such as the British Virgin Islands, Cyprus, and the UAE. Straw buyers, or ‘drops’, are also commonplace, obscuring the ultimate beneficial owners almost entirely.”
This trend persists amid a cooling yet resilient London market. Knight Frank’s Q1 2026 Wealth Report reveals that prime central London (areas like Kensington, Chelsea, and Mayfair) saw £4.2 billion in sales above £1 million in 2025 alone, up 8% from 2024. Foreign buyers accounted for 32% of these, per HM Land Registry figures released in April 2026—echoing Istevich’s 30% estimate. Crucially, Russian-linked purchases, often masked via offshore vehicles, comprised 9.2% of the total since 2022, totaling over £1.8 billion. Savills’ 2026 Global Super Prime report corroborates this, noting a 15% year-on-year rise in ultra-high-net-worth Russian activity, even as overall Russian investment dipped 22% due to sanctions.
Sanctions imposed post-Ukraine invasion, including asset freezes under the UK’s Economic Crime Act and EU measures have failed to stem the flow. Transparency International’s 2026 analysis estimates that £500 million in suspicious Russian funds entered UK property last year alone, laundered through a web of nominees and trusts. “End-beneficiaries remain hidden in 85% of cases,” Istevich warned, citing Companies House data showing over 12,000 new offshore-linked firms registering UK properties since 2022.
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This “London laundering” phenomenon isn’t new but has intensified. Pre-2022, Russians owned 5.3% of prime London stock (per 2021 Zoopla data); now, it’s pushed past 9%, displacing domestic buyers amid average prime prices hitting £2.1 million (up 4% in 2026, per Rightmove). Neighbours like Knightsbridge and Belgravia report entire blocks under foreign control, fueling local resentment.
Broader market stats paint a bifurcated picture. While luxury sales thrive — £10.3 billion total in 2025 (LPEA data) affordable segments stagnate, with overseas cash distorting values. The Bank of England’s 2026 housing report flags risks: foreign speculation inflates bubbles, potentially crashing prices if geopolitical tensions spike. UCL’s Urban Studies Institute models a 12-18% prime drop if Russian flows halt abruptly.
Government responses lag. The 2025 Register of Overseas Entities mandates beneficial owner disclosure, yet enforcement is patchy only 62% compliance in 2026 audits (per Labour’s housing select committee). Calls grow for a “golden visa” ban extension and public beneficial ownership registers. “Without teeth, sanctions are theatre,” Istevich argued.
For Londoners, the stakes are personal. Displaced families in gentrifying boroughs face rents 25% above inflation (ONS Q1 2026), while empty “ghost mansions” dot the skyline — 1,200 such properties Russian-owned, per Empty Homes Agency estimates. As one Chelsea resident told the BBC: “It’s our city, not a global piggy bank.”
Istevich urges vigilance: “Track the shells, seize the assets.” Until then, London’s allure for illicit wealth endures, a gilded loophole in the heart of sanction-land.
Deputy Editor & UK News
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