December 14, 2011
A new wave of cash is pouring into London’s housing market from the eurozone—most conspicuously from Greece, as Greeks face the possibility that they will wake one morning to find their fortunes reduced to wads of useless drachma.
Greeks have been moving money out of the country since the crisis began in October 2009, after the election of the Papandreou government revealed that budget figures presented to Brussels were a fantasy. According to Bloomberg, more than €28bn of cash has left since early 2010. In September, €5.4bn of deposits left the Greek banking system; in October, €8.6bn.
Knight Frank, one agency dealing with upmarket London property, said that over the past 12 months it was aware of Greeks buying more than £300m of London residential property. Other evidence suggests the total is far higher; one adviser said that in the past year Greeks had bought three flats in One Hyde Park, the dark glass block designed by Richard Rogers which now squats between Knightsbridge and the park, for £25-30m each. “There is lot of anecdotal evidence that the last couple of months have seen a big increase in interest from Greeks to invest in London property,” says Vicky Pryce, a former chief economist at the department for trade and industry, who is herself Greek. “This can be interpreted as losing faith in the Greek economy, but also in the euro more generally and wishing to safeguard the value of their euro holdings.”
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