TYCOONS in Europe’s troubled southern periphery are buying up homes in London’s most affluent postcodes and shifting cash to the City’s banks as they flee the Eurozone debt crisis, according to new research.
The proportion of non-British western Europeans buying prime residential property in London has risen to 14 per cent this year from 11 per cent in 2010. Within this, buyers from Spain, Italy and Greece grew to 36 per cent in 2011, from 25 per cent, data from estate agent Savills shows.
Buyers from these three countries also make up half of all western European buyers of properties worth more than £15m and 43 per cent in the £5m to £15m range, the research shows.
Southern European tycoons are also behind the purchase of the 66 per cent of prime houses worth less than £5m snapped up by Europeans.
“In 2011, I suspect the lure of a ‘safe’, sterling denominated asset once again looks attractive as the financial markets in those countries... look particularly precarious,” said Yolande Barnes, head of Savills Research.
London’s private bankers also report a rise in business in Europe’s so-called sun belt, belying the region’s financial quagmire.
“The youngest wealthy entrepreneurs, wealthy families, are looking outside of Spain... They are giving global banks more of a play in that arena,” said Roberto Islas, head of Latin America and Iberia at HSBC’s private bank.
And southern Europe’s rich appear to have resisted the worst of the financial crisis when the region first lurched into the economic downturn, with the millionaire population in both Spain and Italy continuing to grow from 2008 to 2009.
“Private banks are trying to capture these clients who were originally with Spanish commercial and savings banks,” said Lorenzo Goldberg, a Madrid-based partner at London wealth manager AlphaOne Partners.
Banks including Citigroup have opened private banking branches in Spain in recent months.