By Ayano Hodouchi

Tempted by lower prices, rich Russians are back snapping up prime London properties - and it's slowing the fall in the market there, say real estate brokers.

Compared to its peak back in March 2008, prime real estate in London has fallen by almost 23 per cent. That, coupled with the fall of the British pound, puts buyers with U.S. dollars and euros at a distinct advantage.

Since most Russians with substantial wealth stash their hoard in dollars or euros, they have not been as hard hit as you might expect from the dwindling rouble. Indeed, buying property in Britain still seems to be a very attractive option for those with money to spare.

Guy Meacock, an associate at Prime Purchase, said he has heard of recent purchases in and around central London where Russians have splashed out, with recent examples being a wide, low-built house in Kensington for 12 million pounds, another in Kensington for 8 million pounds and a flat in Kensington for 3.5 million pounds.

In one case, Meacock said, a Russian buyer was reportedly preparing to offer 4 million pounds over the asking price of about 25 million pounds on a house in Chelsea, with a 2 million pound non-refundable deposit.

"He hasn't even seen the house," said Meacock. "This is proof, if it were needed, that Russians are not only back, but that they are actively buying at all levels of the market."

Not all experts are so sanguine. "After a period of sustained price falls in the central London market, it is rather early to suggest that we are seeing the beginning of a recovery. However, with bad news seemingly all pervasive, even a slowing in the rate of price falls can be viewed positively. The 1.5 per cent decline in February comes after a period when monthly price falls hit almost 4 per cent each month," Liam Bailey, head of residential research at Knight Frank, said in a statement this week.

Bailey said that 4 million pounds to 10 million pounds is the most popular price range for rich Russians at the moment, and these people are buying homes not to rent out, but as second or third homes for themselves.

After the stock market crash in September, Russians almost disappeared from the scene. "They were busy looking after business interests back home and those who were active in the property market were looking into purchases in France and the Alps," said Yelena Norton, head of the Russia and CIS desk of Knight Frank.

In the last three months of 2008, there were virtually no sales of top class properties in London worth 10 million pounds or more. Now, some people are considering buying again, encouraged by the lower prices.

Grace Margolies, head of the recently created Russian desk at Savills, said that there has always been a steady interest from Russians in central London real estate.

Russians still see London as a safe long-term investment opportunity, as it promises political stability, a reputation for good education and good living, said Margolies.

"Russians have been interested in central London for the past 10 years, and that trend isn't changing. For them, it's one of the safest and most practical investment opportunities."

Renting out is still a viable option for any good property in central London, so if the buyer has no immediate plans to live in the property he just bought, he can just rent it out and not worry about losing his money, she said. The sums being spent vary from 500,000 pounds to 5 million pounds, she added.

"Anything over that is considered to be risky," Margolies said.

Needless to say, Russian oligarchs didn't amass their wealth by buying indiscriminately. They are quite well aware that prices are falling, and are keeping an eye out for a good price and are exacting in their standards.

According to Meacock, Russians want flat space, so apartments on one or two floors or wide low-built houses command a premium in London, which has a limited number of such properties.

It may be a long while before we see the kind of purchases we saw before the stock market crash last summer, brokers said.

Then, Alisher Usmanov, a major shareholder in Arsenal Football Club, bought a London home for 48 million pounds and a mystery Russian buyer bought a sprawling 90-room mansion at Highgate for 50 million pounds.