The new money rescuing London’s property market from Russian retreat

One property that currently has several Chinese buyers aflutter is a Mayfair pile in Grafton Street dubbed the “Gucci mansion”, which previously served as the headquarters of the luxury Italian fashion brand.

On the market for £55m, the eight-bedroom, seven-floor home – which has a sauna, steam room, indoor swimming pool, gym, cinema and four security vaults – is where Gucci designer Tom Ford entertained the likes of Vogue editor Anna Wintour and French billionaire Francois Pinault. 

Before that, while owned by Lord Brougham, the property’s high-ceiling state rooms played host to Queen Victoria and the Duke of Wellington.

So far, it has attracted interest from several ultra-high net worth Chinese house hunters, according to Beauchamp, which is acting for the seller. 

Finch says his company deals with buyers of every nationality but that the Chinese now generate up to one quarter of super prime deals. 

“The Chinese are very important to us and have been a good proportion of the super prime business that we’ve done,” he adds.

Frostier relations between London and Beijing seem to have had little impact, he says, but in the past year deals have been artificially suppressed by China’s “zero Covid” lockdown policies, meaning many would-be buyers “can’t get here”. 

Finch is bullish about the market’s prospects going forwards, pointing to the sheer number of billionaires being churned out each year by the Middle Kingdom as evidence there will be no shortage of buyers.

While America retains the largest number of billionaires, at 735, up by 11 in 2021, China was second with 607, according to Forbes. The country’s list included 60 newcomers, including a host of technology tycoons such as Miranda Qu, the boss of Shanghai-based e-commerce company Xiaohongshu (“Little Red Book”).

Chinese citizens have become the biggest users of the UK’s “golden visa” scheme, which allows investors to pay £2m in exchange for at least three years of residency and later a path to citizenship. Applicants from China have received 33pc of the so-called tier 1 visas issued since the scheme was launched in 2008, ahead of the 19pc issued to Russians. 

According to Transparency International, a total of 1,624 visas have been issued to Chinese applicants and a further 2,623 to their dependents such as family members. 

Yet as Russian buyers recede with sanctions and anti-corruption investigators on their tail, there are inevitable questions over whether Chinese money may also come back to bite.

With so much dirty cash thought to have washed through London, the capital has already earned the unenviable nickname “Londongrad” for its seeming ability to look the other way.

In China, several well-known figures have been jailed in recent years for corruption. In 2020, real estate magnate Ren Zhiqiang was put behind bars for 18 years on charges of bribery and embezzlement of public funds – although some claim an anti-corruption drive under Chinese President Xi Jinping is simply a smokescreen for silencing opponents.

Campaigners say the political realities in China should give estate agents some pause for thought. The heads of MI5 and the FBI recently warned that due to the Communist Party’s pervasive influence, it is sometimes impossible to distinguish between the state and the private sector.

Rachel Davies Teka, advocacy director at Transparency International, says: “While investment from Russia has received significant attention, this should not distract from the money laundering risk posed by funds from countries where corruption is commonplace, like China. 

“Businesses should be on high alert when dealing with wealthy clients from places where bribery and abuse of power are rife, and report any suspicious activity to the National Crime Agency.”

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