Greece: Syriza victory drives wealthy Greeks to London's property market

Wealthy Greeks are pulling money out of troubled Greece and sheltering it in London's prized property market following the election victory of radical anti-austerity party Syriza.

The chief executive of London Central Portfolio (LCP), an asset management firm which runs funds that invest in prime London property, said she has seen an increase in enquiries from Greece since the election.

"We have had I would say within the last four weeks 30 or 40 enquiries from Greeks," Naomi Heaton, who heads LCP, told IBTimes UK. "That is actually probably a tenfold increase over what we would normally have expected.

"Although 30 or 40 might not sound a lot, it is compared to what we have had from Greece previously. And in terms of the fact that when the fund is fully invested, we would probably be looking at a couple of hundred investors all in. So it really is quite a significant sea change."

Bailout conditions for Greece

Syriza was elected in January on a platform that called for an end to the strict terms of the €240bn (£174bn, $269bn) bailout loans it received to spare it from bankruptcy when the eurozone crisis erupted in 2010.

The troika of lenders – the European Union (EU), European Central Bank (ECB) and International Monetary Fund (IMF) – demanded a tough package of reforms for the Greek economy in return for the loans, including austerity, deregulation and privatisation.

The subsequent drastic fall in Greek living standards as unemployment spiked and incomes were slashed caused widespread anger at the bailout packages and led to the rise of the far-left Syriza party.

Greece wants a fundamental renegotiation of its bailout conditions but its creditors say a strict reform programme must continue if the economy is to heal and stand on its own feet again.

Negotiations between Greece and its eurozone creditors are ongoing, though they have been bought four months' breathing space by a short-term deal to extend the loans.

There are widespread fears that Greece will eventually exit the eurozone, an event that could bring the entire single currency area's future into question.

Greeks may pull money out of their economy in the future

Iain Tait, partner and head of the private investment office at asset management firm London & Capital, told IBTimes UK he had not yet seen a spike in interest from Greeks pulling money out of their troubled economy – but one may be coming.

"In general, our Greek clients like UK real estate and have been investing for some time now, so I would expect to see that increase over the next few weeks and months," he said.

"The bailout extension gives only a few months grace period, so I'm not expecting to see stability return to Greece anytime soon and markets such as UK real estate may once again be targeted."

Jonathan Hewlett, head of the London region at estate agency Savills, told IBTimes UK western European buyers make up 15% of the prime London market and are still active.

"Although we haven't seen a great uplift in Greek buyers over the past few weeks, we recently secured a deal in prime central London with a Greek purchaser in excess of £10m," he said.

"Greek buyers have long been established participants in this market and in the midst of the eurozone crisis, there was certainly a fair amount of activity, both buying and selling."

London has seen a rapid rise in property prices in recent years, driven by a mix of a serious supply shortage, a recovering economy and intense foreign investment interest. According to the Office for National Statistics (ONS), the average price of a London home is £502,000.