Next wave of super-rich heading for London as new crises bite

Fri Feb 7, 2014 10:54am EST
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By Chris Vellacott

LONDON (Reuters) - 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 past year.

"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 Reuters.

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 topic.

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.   Continued...

Colourful buildings in the West End of London are seen from The View gallery at the Shard, western Europe's tallest building, in London January 28, 2014. REUTERS/Suzanne Plunkett