Flight of the rats

Lynn Walsh

Wealthy rats are leaping from the sinking ships. As the eurozone lurches from crisis to crisis, the rich and the super-rich in Greece, Spain, Italy and even France and Germany are transferring their wealth to 'safe havens'. The three main havens, it seems, are gold, Swiss francs and upmarket London property.

House prices in England and Wales are stagnant, with a very low volume of sales. But the prices of luxury properties in Mayfair, Knightsbridge, and South Kensington are soaring.

Soaring sales

The number of properties going for over £2 million has risen by 86% since 2009. Sales of upmarket properties in these prime areas have increased over 50% since March 2009.

The average price of houses selling in these prime central London locations is now around £1.2 million. This contrasts with the average house price of £160,417 in England and Wales. Even at this price, a house is unaffordable for most people, given the squeeze on incomes and tighter mortgage conditions.

Yet estate agent Rupert Des Forges "expects it will take just a few weeks to find a foreign buyer for a 1,530 square-foot, or 140 square-metre, apartment within a mansion, with concierge, in South Kensington that is listed at £3.25 million, or $5 million. Someone recently bought two larger properties nearby for around £7.5 million a piece. The buyer was an investor eager to move cash out of the eurozone - in that case, Italy." (If You've Got It, Expatriate It, International Herald Tribune, 5 June)

The super-rich, the oligarchs, the ship-owners, the property speculators, made billions during the boom, avoided paying taxes and are now getting out. This kind of exit is not open for workers whose only escape will be to fight the attempt to land them with the crippling cost of the crisis.

Them and us

Another London estate agent, Georges Verdis, with many Greek clients, "said that he had instructions to buy five large family homes worth tens of millions of pounds in central London if Greece has to leave the euro after elections that are to be held on 17 June. His clients fear severe social unrest if there was a default and a messy exit from the currency... Their money has already been wired outside the eurozone." (IHT, 5 June)

In stark contrast, the latest figures from the Homes and Communities Agency show that the desperate shortage of affordable homes in England is worsening. During 2011-12 there were just 15,698 "affordable housing starts" (11,130 for rent and 3,448 for purchase). This was a 68% fall on the previous year.

Each year in England an estimated 250,000 new households are created. What chance have they of finding a decent, affordable home?

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