Estate agents report buyers from Spain, Italy and Greece are muscling in on the residential market in London's elite neighbourhoods such as Mayfair and Belgravia, joining established colonies of rich Russians, Indians and Gulf Arabs.
Data from upmarket British property consultant Savills (SVS.L) shows that buyers from Spain, Italy and Greece have increased their share of property purchases in central London's smartest neighbourhoods since the start of the year.
"Southern European numbers seem to have increased," said Yolande Barnes, head of Savills Research.
"In 2011, I suspect the lure of a 'safe', sterling denominated asset once again looks attractive as the financial markets in those countries... look particularly precarious."
The proportion of non-British western Europeans buying prime residential property in London has risen to 14 percent this year from 11 percent in 2010. Within this, buyers from Spain, Italy and Greece grew to 36 percent in 2011, from 25 percent.
Buyers from these three countries also make up half of all western European buyers of properties worth more than 15 million pounds ($24.17 million), and 43 percent in the 5 million to 15 million pounds range, the research shows.
And London's private bankers -- specialising in clients whose wealth is measured in tens of millions of pounds -- also report they are booking more business in Europe's so-called sun belt, belying the region's financial crisis.
BANKER SEEKS TYCOON
Banks have invested in the region and hired more local staff because of the conspicuous wealth generation seen during the boom years, when the new rich started to look for opportunities beyond their own markets and local banks.
"The youngest wealthy entrepreneurs, wealthy families, are looking outside of Spain... They are giving global banks more of a play in that arena," said Roberto Islas, head of Latin America and Iberia at HSBC's (HSBA.L) private bank. The region has some high profile tycoons - Greece has its shipping families while Spain boasts figures such as Amancio Ortega, founder of retailer Inditex (ITX.MC), and Real Madrid president and construction magnate Florentino Perez.
And southern Europe's rich appear to have resisted the worst of the financial crisis when the region first lurched into the economic downturn, with the millionaire population in both Spain and Italy continuing to grow from 2008 to 2009.
"Private banks are trying to capture these clients who were originally with Spanish commercial and savings banks," said Lorenzo Goldberg, a Madrid-based partner at London wealth manager AlphaOne Partners.
Citi's (C.N) private banking arm has added to its team in Spain as clients are putting more money to work, partly in response to a need to protect wealth against rising inflation and this often involves banking through London.
"The really large customers want the best the market has to offer and the best is not sitting in Lisbon or Madrid. A lot of the best ideas -- the best solutions, the best products and people are sitting in London," said Luigi Pigorini at Citi, who, as head of Citi Private Bank in EMEA, is responsible for the unit.
And some see tentative signs that the good times may yet return to Europe's Mediterranean countries with a resumption of windfalls coming to families who sell or list their businesses.
"We are beginning to see again a pickup in M&A (mergers and acquisitions) activity in these countries," said Pablo Garnica, head of private banking for EMEA at JP Morgan (JPM.N).
"It's not like there's great momentum around that, but we are beginning to see some signs of pickup in activity... When illiquid wealth becomes more liquid."
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