United Kingdom Property News

Euro zone turmoil boosts London property stampede

Euro zone turmoil boosts London property stampede
LONDON (Reuters) - Worsening financial and political turmoil in southern Europe caused a surge of interest in London property last month with buyers from Greece and Spain showing strongly among investors seeking a safe haven for their money.

The number of Greeks searching for homes costing more than 1.5 million pounds ($2.4 million) on the website of property agent Savills (SVS.L) jumped 39 percent in April compared with the average of the preceding six months, the company said.

"The reason Greeks are coming is very simple," said Dinos Joannou, a 65-year-old Cypriot who works in the Athenian Grocery in the Bayswater district of London and has seen growing numbers arrive this year. "Greece is screwed, there are no jobs and it has been run by crooks."
The number of Europeans buying property in London has grown steadily over the last year as the euro zone debt crisis has worsened but numbers spiked ahead of elections in Greece last weekend that failed to produce a government.

George Kastaros, 37, dresses as a traditional Greek soldier handing out leaflets for the Kalamaras restaurant on Queensway in Bayswater, an area popular among Greeks and home to the St Sofia's Greek Orthodox cathedral.

The Athenian moved to London before the crisis began in 2007 and said the number of Greeks arriving jumped after Christmas.

"Dressed like this, Greek people who have just got off the plane come up to me with their suitcases and ask where they can find a place to live or a job. I was stopped by more than 100 people in January."

The chef at Kalamaras arrived five months ago with his son and daughter, who are a doctor and teacher, he said. "These are well-educated people who cannot find jobs in Greece."

"What we're seeing is another stage in the euro zone crisis gathering pace," said Liam Bailey, head of residential research at property agent Knight Frank. "It's ironic that the more instability you get in the euro zone the more the London property market benefits."

Savills data showed Spanish buyers grew 14 percent in April compared with the same six-month period and Knight Frank registered a 21 percent jump. Searches from Portugal last month were 153 percent up on April 2011 while Italian traffic jumped 46 percent, Knight Frank said.

Growing interest from Greece in the last three weeks has been buoyed by buyers looking to rent out property as an investment, said Noel de Keyzer from Savills.

"There seems to be an endless flow of wealthy Greek buyers, old Greek family money, coming to London both renting and buying."

In addition to countries afflicted by the euro zone crisis, the best London homes have attracted growing interest from Russia, the Middle East and Far East as buyers attempt to protect their assets amid the gyrations of the money markets.

Interest has pushed prices for so-called prime central London properties up by 44 percent in the last three years, more than twice the increase across London as a whole, Knight Frank said.
Kostas Kazolides owns the Halepi Greek restaurant around the corner from Kalamaras and provides advice to Greeks looking to buy real estate or invest as part of club deals in residential and commercial property.

"There have been a lot of new faces walking through the door of my restaurant lately," he said, pointing to the growing popularity of deals in which professionals such as doctors and architects club together to invest.

"There is real and justified fear on the streets of Greece at the moment. People are going hungry and those with money feel threatened by kidnap. My banker friends in Greece tell me about nine billion euros left the country after the election."

Most buyers are reluctant to talk publicly, said one estate agent who specialises in helping wealthy Greek buyers find London real estate.

"With the Greek tax system the way it is, these people don't want others to know how much they are moving out of the country or where they are putting it," he said.