By Ed Hammond, Property Correspondent
London?s housing stock is fast becoming the wealth haven of choice for Italian and Greek investors, with buyers from the troubled eurozone economies on course to double their spending on property in the capital this year.
So far in 2011, buyers from Italy and Greece have poured ?406m into London bricks and mortar, compared with just ?245m during 2010.
The influx means the two countries now account for more than 10 per cent of all foreign property investment in the capital and are on course for a 120 per cent increase over the past year.
Buying activity has accelerated during the past three months as rich Greeks and Italians scramble for safe places to store wealth amid mounting financial crisis in the eurozone?s southern periphery.
?It has become a real flight to capital,? said Liam Bailey at estate agent Knight Frank. ?The desire isn?t about owning a house here as much as it is about just getting money out of the country quickly.?
Mr Bailey said Knight Frank had, in the past month, closed deals for two Greek buyers wanting quick purchases of ?10m homes.
So-called prime housing in London has been one of the best performing asset classes during the past three years, with limited supply and strong demand from Asian and Middle Eastern buyers fuelling rapid price rises.
As well as outperforming other parts of the UK, London has pulled away from New York, Paris and Hong Kong in terms of price growth, increasing 11.4 per cent in the year to October.
However, the activity is concentrated in a few elite pockets of the city, with areas such as Kensington, Knightsbridge and Mayfair receiving the lion?s share of overseas investment.
Noel de Keyzar, head of Savills Sloane Street estate agency, said demand from Italian buyers had ?taken off during the past six weeks?.
?Since this time last year we have seen a 30 per cent uplift in the number of Italian and Greek buyers looking to buy for either investment purposes or for a London base and typically spending in the region of ?1m-?4m,? Mr de Keyzar added.
Jamie Gunning, head of residential investment at EA Shaw, the property consultancy, said Italians had ?surged? into London and predicted the trend would continue.
?We expect to see the flight of money into London property increase as the impact of the cost of tackling Italy?s sovereign debt ripples throughout its economy,? he added.
? The Financial Times Limited 2011
