As the eurozone lurches from crisis to crisis and Greece teeters on the brink of default and exit from the euro, the number of wealthy European property buyers in London has surged. Greeks, Italians, Spaniards and even the French are desperate to convert their euros into bricks and mortar in the capital.
There are three main safe havens now, said David Adams, managing director of Mayfair estate agents John Taylor – gold, the Swiss franc and London property.
Upmarket estate agency Savills has seen web searches from Greece jump by 50% compared with six months ago. Searches from France are up 16%, from Spain 10% and from Italy 9%.
Lucian Cook, director of residential research at Savills, said: “A lot of the early recovery in the housing market [since the first wave of the credit crisis] was triggered by foreign exchange plays, but in recent times this has been replaced by a safe haven effect.”
Prices for prime central London properties have risen nearly 50% since a post-credit crunch low in March 2009 and have just hit a record high – more than 12% above their previous peak in March 2008 – according to estate agency Knight Frank.
Even the falling value of the euro in recent weeks, hitting four-year lows against the pound and so making property purchases more expensive, has failed to put off wealthy Greeks and other euro buyers desperate to park their money somewhere safe.
London has always been popular for its liberal legal and tax regimes. Continued interest from Middle Eastern and Asian, in particular Chinese, investors in central London is also pushing prices higher.
Gary Hersham, managing director of Beauchamp Estates, a specialist in luxury property, has had several inquiries from Greek buyers over the last six months. He expects a significant jump after the forthcoming Greek election. “You need to phone me back after the elections on 17 June, then we’ll see what happens – we’ll see a hell of a lot of people [moving from Greece to London].”
This week, a report from Fathom Consulting commissioned by property developer Development Securities found more than half of the resident population of Westminster and Kensington & Chelsea – housing the bulk of the prime residential property market – are from overseas.
According to Savills, western Europeans and Scandinavians have been the biggest buyers of prime central London property over the past five years. The Middle East and north Africa are close behind, as are eastern Europe and the former Soviet Republics.Source: The Guardian – see full report