Wealthy Iranians eye London property market
London estate agents have reported a surge in inquiries from wealthy Iranians looking to buy homes in prime districts of the capital in the expectation that sanctions against the country will be lifted next year.
Faisal Durrani, head of research at Cluttons, the property consultant and estate agent, said the company had been approached by several Iranians looking to buy homes in the £2m to £5m bracket.
“They want to understand the market as soon as possible for when they are allowed to invest abroad,” he said. “They want an asset that isn’t in the [Middle Eastern] region, and they are drawn by the strong capital values and the growth story.”
He added: “Some of them are concerned about the government changing direction in a few years’ time, and that sanctions could return. It’s a form of insurance policy, an international bolt hole.”
Trevor Abrahamsohn, an estate agent specialising in expensive north London homes, said he had sold Jersey House, a mansion with an asking price of £33m on The Bishops Avenue — a street known as “Billionaires Row” — to an Iranian buyer in 2014.
But he has also seen a spate of Iranians looking to rent property in London ahead of buying homes next year.
Wealthy Iranians have found it “extremely difficult” to buy property overseas under the sanctions regime, said Babak Emamian, a London-based Iranian mortgage broker and financial adviser.
Sanctions were first imposed on Iran in the 1970s but new measures were added in the 2000s amid an escalating dispute with the US over the country’s nuclear programme.
Specific people have been targeted via asset freezing, but Karen Mitchell, a partner at the law firm Charles Russell Speechlys, said the sanctions on Iran are different from those elsewhere in that “there are also restrictive measures which apply to ordinary Iranian people and businesses who have no connection with Iran’s nuclear programme”.
These include restrictions on money transfers, while certain UK banks avoid dealing with Iranians because of worries about breaching complex sanctions legislation, said Ms Mitchell.
Some Iranians were able to transfer money overseas before sanctions were tightened, while Ms Mitchell said large transfers to the UK can still be made with special permission from the Treasury.
Sanctions are expected to be gradually lifted in the coming months after Iran agreed a landmark deal with world powers.
London was once a centre for expatriate Iranians under the UK-backed Mohammad Reza Shah Pahlavi, who was overthrown in 1979, and the UK is still home to more than 80,000 Iranians. But the world’s biggest overseas Iranian community is now in the US.
The United Arab Emirates is also a popular destination for Iranian residential property investment, said Mr Durrani.
Prime central London homes have attracted thousands of overseas buyers in the past decade, with purchasers seeking an investment in a politically stable country or a bolt hole in a global city. But the market has faltered this year after prices reached record highs and the rate of new Asian and Russian buyers slowed.