LONDON Feb 7 Political and financial upheaval
in some of the world's largest emerging economies is driving a
new wave of rich migrants to London's supercharged property
market as a place to park their wealth, data from a leading real
estate agency showed on Friday.
Knight Frank, a specialist in upmarket properties, said it
had seen online enquiries about British homes from crisis-hit
countries such as Argentina, Ukraine and Turkey soar over the
"There is potentially a further wave of investment headed
for the prime central London property market," Tom Bill,
associate in the Knight Frank residential research team, told
This is despite prices in London already having risen
sharply after a rush of foreign buyers of London mansions,
prompted by the Euro zone debt crisis and the Arab spring, along
with Britain's political stability and benign property taxes.
Prices in London overall in the three months to December
were 14.9 percent higher than a year earlier, according to
figures from mortgate lender Nationwide, and some top-end values
have inflated even more, driving prices in Britain's capital
beyond the reach of most residents and making it a hot political
Finance Minister George Osborne said in December he would
impose a capital gains tax on foreign property investors from
2015 in a bid to allay fears that wealthy foreign buyers are
driving a property bubble.
In the case of Brazil, interest has more than doubled over
the 12 months to the end of January, Knight Frank said, adding
that an increase in web traffic translates into a pickup in
actual sales within three to six months.
The agency, which sells homes worth at least 1 million
pounds ($1.6 million) and is marketing a 15 bedroom house on The
Bishop's Avenue, London's "billionaires row", at 65 million,
said the bulk of those enquiries were for homes in the capital.
"This doesn't surprise me at all," said Sophie Dworetzsky, a
partner specialising in rich private clients at law firm
Withers. "If you invest in high-end London property you probably
feel you have a degree of certainty - it's like a safe
The biggest rise in interest came from Brazil, with a 115
percent spike over the 12 months to the end of January, compared
with a year before.
Brazil is one of the so-called "fragile five" economies seen
as vulnerable to the U.S. Federal Reserve scaling back monetary
stimulus, because of its large current account deficit and
reliance on outside capital.
The next biggest increases in enquiries came from Argentina,
in the midst of a currency crisis, and Ukraine, which is reeling
from a wave of political unrest. Enquiries from both countries
spiked 67 percent.
Other members of the fragile five group also saw a pickup in
internet househunting in London's plushest neighbourhoods.
Enquiries from Indonesia and Turkey, which have both endured
weeks of capital flight and falling currencies, rose 10 percent,
while South African interest climbed 9 percent and Indian
interest was up 3 percent.
London and the top end of its property market is a well
established harbour for money fleeing economic and political
instability, because of Britain's relative stability and a tax
regime that historically goes easy on foreign residents'
However the issue of foreign property purchases is
politically controversial, with many media reports saying
expensive houses and appartments are often bought only as
investments and are left unoccupied. The Guardian daily reported
this week that several mansions on The Bishops Avenue had been
left empty and were falling into disrepair.
Following is a summary of percentage changes in visits to
Knight Frank's website from specific countries in the 12 months
to the end of January 2014 versus the prior 12 months:
South Africa +9%
($1 = 0.6125 British pounds)
(Editing by David Holmes)