A home cinema, private gallery, topiary - what Russian buyers want, they get. And where they lead, others will follow
A shiny black Steinway grand sits in the corner of an all-white room, accompanied only by two pristine white sofas and a neat picture formation on the walls. The gallery-like basement room in the smartest new house in Mayfair feels insulated from the financial storm outside. This showspace might well clinch the deal on the £17.5 million townhouse on Culross Street. A wow-factor entertainment space is at the top of the Russian wish list and as London's super-prime market begins to slip, Russian buyers are calling the shots.
What Russians want trickles down through the market, influencing buyers' expectations and forcing sellers to up their game - particularly if they want to shift homes in this fragile climate. James Taylor, of the property giant British Land, says: “When investors are ready to re-enter the market they will demand quality. The exemplary details that we now see as superior will become standard.” Higher-calibre homes could be the (albeit rather faint) silver lining for buyers once the financial crisis is over. The effects are already showing in a small number of stylish affordable flats now for sale in London.
Magdalena Pleskacz knows what Russians want. She runs Prospekt London, a property relocation service for high-end émigrés looking for smart London homes. She has clients of all nationalities, but Russians are her main buyers. Word of mouth in Chelski has brought her a steady stream of clients. “Russians love a recommendation,” she says. “You have to prove that you are honest and live up to the recommendation, then they trust you completely.”
Since Russians first flooded into London five years ago, things have changed for both buyers and sellers. Russian tastes have become more in line with European style and buyers have developed an eye for the highest quality. “They are obsessed with having the best of everything,” reports Pleskacz. “This ranges from practical features, like garages and ovens, to the finishing touches, like hand-carved banisters and perfectly cut topiary.” In short, “Russian buyers have become more choosy,” explains Brian D'Arcy Clark, head of Savills' Central London agency.
In response, top-end sellers have pulled their socks up. Developers have learnt that if you spend on the finish you can easily recoup the outlay in additional value. Super-prime buyers have always purchased homes for the details - the rest of us are now catching up. The current market highlights the difference between the flawed properties and the perfect properties. The dividing line is simple: those with flaws don't sell.
“Russian buyers simply won't tolerate an inch of shoddiness,” advises Grace Margolies, head of Savills' new Russian desk. The developer behind the Mayfair “wow” house, Tim Fulstow of Fulstow Holdings, evidently knows this. The basement cinema, shown above, is one of the best in London. Leather-upholstered swivel-chairs surround a suede-covered day-bed, there is a beautiful starlit ceiling and the stereo delivers sound of an immeasurably superior quality to that provided in most local cinemas.
At the other end of the house, the top-floor master bedroom suite opens on to a secluded roof terrace, which is a southwest-facing suntrap with a rather Dickensian view of rooftops and chimney pots. “This is what Russians come to London for: the typically English townhouses and traditional London views. They will always pay for a view,” says Pleskacz.
Perhaps contrary to popular perception, Russians dislike property descriptions to be over-the-top. According to Lucy Russell, director of Quintessentially Estates, the typical Russian buyer “respects clarity and accuracy and hates the use of flowery language”. The cold light of the credit crunch means that British buyers now feel the same. Quintessentially Estates regards Russians as “decisive about what they want: savvy rather than emotional” - qualities that are likely to see them through the downturn.
Both Lucy Russell and Magdalena Pleskacz know two types of Russian client: the middle-aged investor and the gilded-youth buyer. The younger buyers are more interested in discretion and like lateral living. Pleskacz has sold multiple properties in Chelsea Bridge Wharf, the high-end riverside development by Battersea Park, to Russian parents whose children are studying in London. “Chelsea Bridge Wharf is an easy option as a first flat away from home and is safe for young students, because it is gated.” Russians are certainly security obsessed. “The perception is that Russia is an extremely dangerous place, but many Russians feel unsafe in London. In Russia crime is premeditated and specifically motivated; in London anyone can get attacked with little reason,” says Pleskacz, who thinks the well-stocked nature of the average Russian jewellery box makes buyers particularly fond of portered blocks and CCTV cameras - two of the latter conspicuously flank the entrance to 17 Culross Street. The basement cinema screen can be tuned in to the cameras, which can also be accessed remotely from anywhere with an internet connection, for spy-like omniscience.
Mayfair, Knightsbridge, Belgravia and Chelsea are the Russian favourites, but if they can't find a property they want they will look in Hampstead, St John's Wood and the Wentworth and St George's Hill estates in Surrey. Sky-high prices in all these districts have kept them resilient until now, but the latest Prime Central London Index from Knight Frank indicates that the super-prime market is starting to crack. Liam Bailey, head of Residential Research, says: “After a very strong run the super-prime sector has peaked in pricing terms, and unsurprisingly September saw prices fall by 1.7 per cent. Nevertheless, prices in this sector are still 11.7 per cent higher than a year ago.”
Russell backs this up: “The market between £5 million and £10 million is now being affected by the slump. International buyers are being told to hold off from buying by their financial advisers, who are waiting to see what happens. Deals closer to £20 million are still happening as demand here remains higher than supply.”
According to Knight Frank, competition for the very best houses remains fierce, but 17 Culross Street has been on the market for three months and, despite the asking price being reduced from £20 million to £17.5 million, it could remain unsold for a few more. Two years ago that was a long time for a house of such quality. Pleskacz believes that it will sell for the current asking price if the developer can wait long enough for the right buyer to come along.
Wealthy individual sellers of super-prime houses can afford to wait for buyers but developers now have the banks at the door, demanding that loans be repaid. Expect the international savvy set to make the most of it if London's top properties start begging for buyers. Meanwhile, the knock-on effect of high Russian demands will define the new must-have standard for successful sales when the market picks up.