London property: foreign buyers from Iran expected to rise by a quarter

Iranian ultra-high net investors, or buyers with assets of at least $30 million, will spend up to £6 billion over the next five to ten years

Wealthy Iranian buyers will join the ranks of Qatari, Kuwaiti and Saudi buyers and become significant players in the London luxury property market after the lifting of sanctions, according to research.

The number of Iranian buyers looking for homes in London over the next two years will rise by 25 per cent, according to Rokstone, a Iranian-owned London estate agent.

Iranian ultra-high net investors, or buyers with assets of at least $30 million, will spend up to £6 billion over the next five to ten years on investing in overseas property, the report has found. London will be one of their top locations for buying alongside Dubai, Switzerland, Germany and the South of France.

Most buyers will look to spend from £1 million to £30 million on a London home, with the top five most popular locations for purchase being Knightsbridge, Mayfair, South Kensington, Hampstead and St John’s Wood.

Four types of Iranian investors will look into acquiring a property in London: private individuals or families, professional investors, private companies and quasi-state backed entities or sovereign wealth funds, Rokstone said.

Becky Fatemi, managing director of Rokstone, said London will be Iranian’s top location for investing in real estate.

Fatemi noted that historically there are deep ties between the UK and Iran. Between 1945 and 1979 the Shah of Iran, his Royal court and the business elite had lots of ties with Britain and the elite owned luxury residential property in London and the home counties.

“Alternative locations have less appeal. Historically, rich Iranians also invested in New York and Los Angeles, but US government primary sanctions remain in place so these choices are not available,” Fatemi added.

International sanctions on Iran were lifted in January this year after a watchdog confirmed it had complied with a deal designed to prevent it developing nuclear weapons. The lifting of sanction unlocked tens of billions of dollars’ worth of Iranian assets.

Jennet Siebrits, head of residential research at CBRE, a property and real estate services adviser, said Iranians are likely to look at both commercial and residential opportunities within the London market.

“We believe Iran could well become a major force in the London residential market, both via funding projects and buying homes (for individual use and to rent out) in the coming years,” Siebrits wrote on CBRE’s blog.

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 London.

“We had high-net-worth Iranian individuals who came up and said they were interested in making overseas investments as soon as the sanctions were lifted,” Durrani told Property Week.

“I asked: ‘Where in Dubai are you looking?’ They said they were looking at Dubai but their top international city of choice is London,” he added.

Rokstone highlights that London also appeals because it has a sizeable Iranian expatriate community. An estimated 80,000 Iranians live in the capital. Another attraction is the education system.

“It will be gradual at first. It will take at least 12 months for people to look at their tax structuring and then 3-6 months to find the right London property and invest.

“Education is a key part of the attraction, Britain has an outstanding education system and many wealthy Iranians will want their children to have a school or university education in London and they will buy a family flat as a base for them,” Fatemi said.