AS foreign investors are starting to flood in to the Spanish market it is Spanish money that has helped fuel London’s property boom.
Spanish investors see London property as a ‘safe haven’ for their money, research from Said Business School at the University of Oxford proves.
Professor Tarun Ramadorai and Dr Cristian Badarinza found a direct correlation between economic and political risks in Spain and house price changes in particular areas of the British capital.
The researchers found that recent economic difficulties have left those with capital to invest avoiding the risks of the economy at home and turning to high-profile foreign cities like London as a ‘safe haven’.
This goes a long way towards explaining why London house prices have continued to rise at a disproportionate rate compared with those in the rest of the UK and sheds light on the well-known fact that capital appears to flow ‘uphill’ from relatively poor to relatively rich countries.
Ironically, Spain topped a poll by Rightmove Overseas of places British buyers want a holiday home.
The Mediterranean country’s weather and relaxing lifestyle still attracts buyers despite the problem suffered by some owners buying ‘illegal’ property and the financial crisis.