How can you effectively rein in Mr. Putin?

How can you effectively rein-in Mr. Putin? ‘Tweaking the tails’ of his Russian cronies will not do the trick, since there is only one way. Let me explain…

The Russian Trade Delegation Compound in Highgate West Hill, N6, is an unlikely ‘fountain head’ of espionage and intrigue, which belies it leafy, sleepy, suburban ambience. It was established in 1920 and over the years, has been a Mecca for Russians and various individuals from the Soviet Union since time immemorial, supposedly to encourage business in the UK. During the ‘shadowy’ days of the Cold War, goodness knows how many dubious characters would regularly file in and out of this place and you only have to look at the plethora of antennas on the roof, to work out what they really may have been doing there.

Lets put it this way, one presumes that they weren’t all just watching foreign television stations, but presumably were participating in ‘discreet communications with ‘Mother’ Russia’. A scenario which would have given Frederick Forsyth, plenty of content for one of his novels.

Scene from The Ipcress File

When entering the compound, it appears like a film set from Michael Caine’s, 60s thriller, ‘The Ipcress File’ which was based on the mysterious relationship between the MI5 and the KGB.

It is surrounded by Fitzroy Park and Hampstead Heath and it is of no surprise that ever since the Berlin Wall was ‘torn down’, Russians and Eastern Europeans have been buying in this locality and its environs.

With delicious irony, about 500 yards away from this property, is Karl Marx’s grave, in Highgate Cemetery. Is it any wonder therefore, that the place of choice to bury the lead lined coffin of the Polonium 210 victim, former Russian spy, Alexander Litvinenko, was the same place?

The mansions which can be bought in these leafy enclaves, are to the Russians, reminiscent of the Dachas in the semi-rural suburbs, outside of Moscow.

Witanhurst, second only to Buckingham Palace

It is therefore, no surprise that one of the largest mansions in Europe, Witanhurst, almost abuts the trade delegation building itself. It has 25 bedrooms, 70’ ballroom and is surrounded by a 5-acre garden with panoramic views over the London skyline, that are to ‘die-for’. It was purchased, through Glentree International, for £50million in 2008 and then, reportedly, re-developed by Andrey Guryev, Russia’s 28th richest man, at huge expense. This labyrinthine edifice, must be conservatively worth £300million, in today’s market, and this humungous figure, by any measure, ranks as the most expensive house in the world today, which in scale terms, is only eclipsed by Buckingham Palace, itself.

Understandably, the first-port-of-call for Russian buyers was the semi-rural backwater, Fitzroy Park. They then broadened their areas of interest to include the cherished suburb of nearby Kenwood, which boasts The Bishops Avenue as its flagship street, amongst other highly desirable residential addresses.

In fact, some of these Russian buyers quite liked the brand-new Buxmead development in The Bishops Avenue, which is better facilitated than even the gold standard ‘One Hyde Park’ scheme in Knightsbridge.

Glentree sell 90 percent of properties in this locality on a regular basis and up to three years ago, 40% of the market emanated from Eastern Europe. In fact, one of the most notable Russian buyers, was the son of the decorated Russian, military hero, Marshal Zhukov, who became Chief of General Staff for the Russian Army, during the Second World War.

In order to celebrate Glentree’s 35 years of business, a number of years ago, we invited President Gorbachev as our guest of honour, to a glittering bash held in the exceptional Toprak Mansion in The Bishops Avenue, where the ‘great and the good’ of London and Eastern Europe were gathered. Evgeny and Alexander Lebedev were amongst many other billionaires and the guest list included the X-Factor judges. Anyone, who was anyone, was there.

English Heritage

The Eastern Europeans spent many tens of millions of Pounds over time buying various landmark properties in this locality. They had read English Literature at school and had seen many films about the British lifestyle and wanted to live the ‘English dream’ by satisfying a life-long ambition to purchase a property in London – a piece of UK Heritage, if you will!

Some of the best private schools are located in this area i.e. Highgate School, Channing, UCS and the Russian families could live in relatively safety here.

From 2000 to 2014, a few of the young, wealthy, uber oligarchs, preferred to buy landmark properties in the ‘Golden Triangle’ of Mayfair, Belgravia and Kensington. They liked to be more central and amongst other conveniences for their ‘trophy wives’, the elite fashion oases of Sloane Street and Bond Street enabled them to ‘shop until they dropped’.

Emporiums and restaurants, such as Borshtch ‘N’ Tears, Mari Vanna, Hedonism and the Dacha Delicatessen Russian Shop, started ‘springing up’ in various locations in London, frequented and supported by their Russian sycophants.

Around the spring of 2014 the US, EU and Canada exerted painful Sanctions on Russia, after the Crimean Referendum and just before Putin signed the decree acknowledging Crimea as an independent state.

Russian buyers, from torrent to trickle

As a result, the number of Russian and Eastern Europeans purchasing properties in London started to significantly reduce from a torrent to a trickle and then stopped altogether. We had not seen ‘hide nor hair’ of them up until summer 2017. From this date, lured by the depreciation in Sterling after the Brexit Referendum, we have seen a great increase of buyers from these regions proclaiming that they had lost out by not buying into the London Residential Property Market in 2008, when the Pound was low and they were not going to lose-out again.

Glentree has sold £381million of property in the last 18months in the Kenwood area and a third of these sales were to Russians and Eastern Europeans.

They see that values of expensive properties along the northwest London corridor, particularly in Highgate, are down by 25% as a result of the draconian Stamp Duty increases, imposed by former Chancellor Osborne. This, together with the currency devaluation of 15-20% provides an irresistible bargain of almost 50% discount on values that were available at the peak of the market in 2014. Frankly, we are happy to have them in this challenging marketplace, where turnover is down by 70%.

Do these Russians use ‘dirty money’ as the media claim? With the stringent money laundering provisions, it is now very difficult indeed to use the Banking System without proving the origins and ownership of monies. Would any buyer from China, Nigeria, The Middle East, India be able to stand up to the required scrutiny and why would the Russians be any more ‘unclean’ than these other nationalities? With the London Residential Property Market teetering on the edge of a recession, we have to be careful that in the interests of sanctity, we do not ‘throw the baby out with the bathwater’. The changes to Non-Dom residency, have produced an exodus of wealth creators from this country, only to be welcomed by newly created, favourable, fiscal arrangements in France, Italy and Portugal. We need inward investment from these parties, more than ever before, in the post Brexit environment.

London is the first place of choice for foreign buyers, since it is the ‘happening place’ and the centre for excellence of many fields of commerce, culture, education, cuisine and couture, all located in one, convenient city. Besides this, English is the universal language of the World and the Capital is not only geographically well located for east and the west, but is also blessed with a favourable time zone.

Their investment is safe in this liberal and stable economic climate and I am not sure that the lame response of the UK government, by trying to ‘tweak the tails’ of the oligarchs, in order to teach Putin a lesson, that he should not attempt to kill his ex-spies on our soil, will have any meaningful effect.

As an illustration, by frustrating Mr. Abramovich’s visa request, this may well endanger the much-needed redevelopment of Chelsea Football Club’s new stand and will starve London of more than a £1billion worth of regeneration which will provide a substantial housing contribution (both private and affordable), just when it is needed most. For the government to ‘shoot itself in the foot’ is a perverse way to punish one’s adversaries!

‘Rain on Putin’s parade’

The truth is, that if they really want ‘to rain on Putin’s parade’, instead of threatening not to send Prince William and his entourage to the World Cup in Russia this summer, Prime Minister May should, in common with other European and world countries, show solidarity by unilaterally withdrawing their nations’ football teams from the tournament. It may even save the English team an ignominious defeat on the pitch.

This would deny President Putin his imperious moment as he struts the world cup stage, in a more meaningful way than any sanctions or punitive measures on Putin’s cronies, would be able to do. He will no doubt ‘parade himself’ as did Hitler in the Summer Olympics of 1936 and to starve him of this moment of glory, would make a very significant dent in his pride.

He will then understand, in no uncertain terms, that brazen attacks on foreign soil will not be tolerated by the West.