London's growing Russian super-rich

By Rory Cellan-Jones Business correspondent, BBC News

It is not just wealthy Britons that enjoy the delights of Royal Ascot

Vladimir and Olga Metrohin flew into London this week.

They spent a day in the Royal Enclosure at Ascot and looked at a £3m penthouse as they continued their search for a London property.

The Metrohins are just part of a wave of Russians now choosing to spend part of their fortune in London.

New figures from the Bank of England highlight the scale of this investment.

In 2002, deposits by Russian companies and individuals held in UK banks amounted to £5.8bn.

By 2004 that had risen to £14.4bn, and by the end of March this year, the figure was a staggering £49bn.

It is not just the [Russian] oligarchs here now, there are professional people, doctors and so on Estate agent Alexandra Lovell

Russian money is having a big impact on all kinds of markets, and London's estate agents, art dealers and banks are all eager to deal with a new breed of big spenders.

The property company Savills estimates that a third of what it describes as "super-prime" properties - those costing £10m or more - are now going to Russian buyers.

Most valued clients

Olga Metrohin says she and her husband are buying an apartment in London because they want their children to study in the UK. But she says they're also attracted by "the history, the culture and the people".

Wealthy Russians are said to value expensive jewellery

In Sotheby's this week, an elderly man carrying a Russian guide to London was inspecting the pictures at the preview of a major sale of Impressionist and Contemporary Art.

The sale set new records and Russian buyers were prominent in bidding up the prices.

On Bond Street, exclusive fashion stores and jewellers now count London's Russian residents amongst their most valued clients.

Arnaud Bamberger, the managing director of Cartier UK, has been welcoming Russians into his store for more than a decade.

He says they recognise the value and the tradition of jewellery - and they are willing to pay for it.

"The most expensive piece I have sold was a necklace for more than £1m," he says.

"I now see it being worn by a very beautiful Russian woman, and I like that."

'Uncertain money source'

Mr Bamberger says in the early days, Russians sometimes arrived bearing attaché cases full of cash, but he now encounters a much more sophisticated attitude to money.

It is fair to say that not everyone is happy to deal with the Russians. At least one of London's private banks will not offer them accounts.

"We're not entirely sure where their money comes from," an executive says.

But others say London should be happy to welcome middle-class Russians who have made it in Moscow and are now looking to spend it in the UK.

Alexandra Lovell, a Russian estate agent at Savills, says her clients are "nice, people normal people, open people".

"It is not just the oligarchs here now, there are professional people, doctors and so on. They are certainly not turning up with their money in briefcases."

In the 70s and 80s, it was wealthy Arabs who flocked to London.

Now the Russians are taking their place - and the Chinese may soon follow.

If you want to follow trends in the world of the super-rich, listen to what they're speaking in Mayfair, Belgravia and Knightsbridge.

Rory Cellan-Jones' report on Russians in London was broadcast on the Ten O'Clock News on 23 June, 2006.