Greeks buy London property to escape debt crisis

10th November 2011, Comments 0 comments

Greek investors are buying up London property in increasing numbers as they seek a safe haven away from the debt crisis engulfing their homeland, property agents said Thursday.

With their country's possible exit from the single currency now openly discussed amid political turmoil, some Greeks fear keeping money at home could be a huge mistake and are scrambling to pull it from the eurozone entirely.

Many Greeks appear to regard putting their savings into London homes as a good alternative, as the market is relatively stable and offers reliable returns, agents say.

"Greeks have been a part of the central London market for quite some time, but about 18 months ago their numbers began to increase," Liam Bailey, head of residential research at property consultancy Knight Frank, told AFP.

Richard Barber, a partner at estate agent W. A. Ellis, which focuses on property in upmarket districts such as Chelsea and Knightsbridge, said interest had spiked in the past three weeks as the crisis in Greece escalated.

"They'd rather have their money in prime London property than sitting in Greek bonds," he said.

"I think London property has a reputation for being a safe haven."

Until recently, Greeks accounted for about half a percent of all London property sales over £2 million (2.3 million euros, $3.2 million) but this figure had tripled to 1.5 percent over the past year, said Bailey.

Greek buyers in London accounted for about £250 million worth of transactions in the market in the past 12 months, he said.

"Greeks are not dominant but they are relatively important at the moment," he added.

That compares to Russians -- the biggest foreign buyers in London -- who account for 6.5 percent of the market, with French, Italian and Hong Kong nationals, each making up about three percent of the market.

Up until a year ago, Greek interest in London property was driven mainly by the weak pound but this had been replaced by a sense that investors were pulling their money out of Greece as confidence evaporated.

In recent months, "it's become more the capital flight issue", said Bailey. "You've got people in Greece with a lot of assets who are looking to put those outside of Greece and outside the eurozone at the current time."

The instability was highlighted on Wednesday when hopes of a breakthrough in naming a new leader for Greece were dashed again as politicians failed to agree on a candidate.

On Thursday, however, a new premier was finally named -- Lucas Papademos, a former central banker who helped manage Greece's entry into the euro a decade ago, but it remains unclear how much he can do to stabilise the country's strained finances.

Bailey said it seemed likely Greeks would be flocking to snap up London property for the foreseeable future.

"Until there's some sort of sense of clarity of where the eurozone issue goes in Greece, that sort of trend will continue," he said.

© 2011 AFP

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