London (CNN) – As French and Greek voters head to the polls this weekend, some property owners across the Channel will be rubbing their hands with glee.
The reason: a robust real estate market in London's most exclusive areas which have become a safe haven for eurozone investors keen to preserve family fortunes and avoid tightening tax regimes back home.
A favorite to win France's presidential elections on Sunday, Socialist Party leader Francois Hollande once quipped that he didn't like "the rich." Among his key policies: a 75% income tax band for the wealthiest citizens, which experts say will exacerbate an exodus already underway.
London is home to an estimated 300,000 French expatriates, often earning it the nickname “Paris-upon-Thames.”
And no area exemplifies the trend quite like the enclave of South Kensington.
And no area exemplifies the trend quite like the enclave of South Kensington.
This once quiet and quintessentially English part of town is now home to thousands of French families. The area has its own school, or “lycée,” a Francophone cinema, cafes and cake shops – all catering to an army of well-heeled Continentals eager to set up home in London.
Property website Rightmove estimates home values in Kensington rose on average 5% to 6% per month in the first quarter of the year. That's almost six times faster than the rest of the capital, while local estate agents Douglas and Gordon say asking amounts in prime postcodes like “SW7” and “SW5” have soared 40% since the nationwide house price peak of 2007.
The result: the average house in this chic quarter now goes for around $3.2 million.
So far... So French...
Property brokers Knight Frank say French investors were the second biggest group after British buyers in the first quarter, accounting for 8% of real estate purchases.
So far this year they say enquiries from French clients have soared 19%.
At nearby Douglas & Gordon meanwhile demand is so buoyant they are setting up a special French-speaking office. The new branch is hiring four French staff and will be up and running this summer, just in time for the Olympic Games.
“The French have always loved this area but we are seeing more and more,” says Ed Mead, director of Douglas & Gordon in South Kensington.
“They like the wide avenues and big apartments this part of town offers but also the quaint mews houses. To think some of these properties were built as stables for horses originally but they are now they are worth $2-to-$3 million but demand is strong and now they are all being redone.”
But it's not just the French who are facing a change of government and an uncertain future in the eurozone.
Wealthy Greeks have been ploughing their money into parts of the British capital since their country's first bailout two years ago and continue to do so, much to the delight of those with something to sell in “South Ken.”
Ben Board's family has just accepted an offer to sell their two-bedroom apartment in the desirable district for around $2 million from a Greek buyer. Not only was the amount not far from his asking price but it was entirely in cash. What's more: it came only two months after the flat hit the market.
“We had very strong interest. Perhaps 200 requests to view the flat, mainly from Southern Europeans,” said Board.
Britain may be in the throes of recession but as the eurozone crisis continues to drag on, the dreaded double dip is no deterrent it seems for those in need of a port in the storm. And that for the moment that harbor remains Prime London real estate even if it is exorbitantly expensive.
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