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From The Sunday Times

October 28, 2007

Shires fall to foreign land rush

Dipesh Gadher and Helen Davies

ALMOST half of all country homes in the southeast of England worth £5m or more are being bought by foreigners, according to new research.

The record level of acquisitions indicates that Russian oligarchs and tycoons from Asia and the Middle East are rapidly spreading their influence beyond central London as they seek to emulate the lifestyle of Britain’s landed gentry.

Taking their lead from the likes of Roman Abramovich, the billionaire owner of Chelsea football club, many buyers are choosing properties with large estates to allow them to escape the capital for the weekend and indulge in a spot of shooting or fishing.

In the year up to September, foreigners accounted for 42% of purchases of country homes in the southeast, according to figures compiled by Knight Frank estate agents.

In 2005, the proportion of overseas buyers was less than a quarter. In Scotland, almost a third of properties valued at £5m and above are now going to foreigners.

Across Britain, up to 75% of country homes worth more than £10m have been snapped up by wealthy investors from abroad over the past year. Liam Bailey, head of residential research at Knight Frank, believes this figure is likely to rise to about 90% within the next three years.

“At the top end of the market this trend is only going to increase, with demand being driven by buyers from the commodity-rich economies of the Middle East and former Soviet Union,” said Bailey. “That’s where all the money’s at.”

Until fairly recently, most overseas buyers were mainly interested in central London or locations within the M25, such as Esher in Surrey, often to secure access to a top private school for their children.

Although a swathe of land to the southwest of the capital remains the most popular spot for foreigners, growing numbers are looking further afield to places such as Hampshire, the Cotswolds and even Cornwall.

“These are people who have tended to put their roots down in London, but now they are more settled they want to enjoy the English way of life,” said Rupert Sweeting, head of Knight Frank’s country department.

“They know they can jump into a helicopter and get to wherever they want to be within just a short space of time. There are more Indians who are now starting to come over, and the last three or four months have seen Scandinavians with deep pockets moving into the country house market.

“I think the Chinese are going to be the next guys on the block as they have already started looking for properties in London.”

The trend reflects figures released by the government last week which revealed that a record rise in immigration is helping to fuel a surge in population which is estimated to hit 71m by 2031.

Wealthy Indians may follow the lead of Punjab-born Lord Paul who recently splashed out on a £6m Georgian mansion and 250-acre farm near the Chilterns.

Until now, Paul, a Labour donor who moved to Britain 41 years ago, has resided in a penthouse apartment in Marylebone, central London.

Detailing Paul’s new purchase, the Calcutta Telegraph described him as “possibly the first Indian tycoon to make such a strong emotional commitment to England’s green and pleasant land . . . He makes the the subtle transition from a Labour life peer – all sorts of people have entered this category in recent years – to a real English lord of the PG Wodehouse kind.” Earlier this year, it was reported that a businessman from Kazakhstan had paid up to £7m for Sunninghill Park in Berkshire, the marital home of the Duke and Duchess of York.

The move follows Abramovich’s £12m acquisition several years ago of a country estate at Fyning Hill, near Rogate, West Sussex. He later ordered 20,000 grouse and pheasants so that he could pursue his passion for shooting.

Boris Berezovsky, the London-based Russian tycoon, is also part of the country set, having bought the Lutyens-inspired Hascombe Court in Surrey from Chris Evans, the disc jockey, for £10m.

Peter Aven, head of Alfa-Bank, the biggest private bank in Russia, is a near-neighbour of Berezovsky. He and his wiife Elena, a historian, are building a new home on the site of Ingliston House, occupying an 8.5acre property on the Wentworth estate near Virginia Water.

This trend makes no matter so long as they pay full property tax and the local council and thereby the local people, always have control over planning matters.

Alastair MacGregor, London,

Big surprise. Of course the new rich of Russia, China and India will want a piece of the UK, (not to mention other EU countries) a safe investment for posterity. With populations of the latter two countries numbering well over 2 billion, the numbers of potential buyers will soon exceed supply. It's all part of that heady mix of which the future revolution will be inspired - or to quote Michael Moore out of context, "Hey, man! Where's my country?"

Eugene, Chester, England