Eurozone exiles lift prices of London's luxury homes

Des res: One Hyde Park in Knightsbridge, home to seriously wealthy residents

11 April 2012

Nervous Greeks and Italians seeing the UK luxury property as a safe haven for their cash, sent prime London house prices soaring higher during July than at any other time in the last six months, agents said today.

The values of flats and houses costing more than £3 million soared almost 10% in the year to July, according to estate agent Knight Frank.

It said that was the highest jump since January, and was thanks to millionaires in Europe's sickest economies investing in property in wealthy London enclaves to escape the eurozone debt crisis.

Spaniards, Italians and Greeks are now following Arabs and Russians in buying luxury homes in areas such as Mayfair, Kensington and Knightsbridge.

Gráinne Gilmore, head of UK residential research at Knight Frank, told Bloomberg the number of luxury homes for sale has risen by about 8% since the start of the year, but prices have still shot up.

"The increase in supply is in no way making up for the pent-up demand," she said.

"Chelsea homes are now selling for 7.7% more than in January, whilst Mayfair residences have seen values rise 7.2%. With everything that's going on in the eurozone, London is definitely seen as a safe haven.

"You can't underestimate the demand that is coming from overseas."

This has been spurred on by the slide in value of sterling, making multi-million pound London homes more affordable for foreign buyers.

The surge in July was also partly due to Middle Eastern investors piling into the capital before the start of Ramadan this month, Knight Frank said.

Rival agency Savills has reported the proportion of non-British, western Europeans buying prime property in London rose to 14% this year, from 11% in 2010, and is expected to grow further.