Little Luxembourg is luring firms on the lookout for a post-Brexit foothold in the European Union, from JPMorgan to insurance giant AIG.

But while many find the Grand Duchy a multilingual paradise, would-be expats are being warned not to expect the cosmopolitan lifestyle they currently enjoy in London and that they should prepare to spend long hours on clogged roads.

The nation is already packed to the rafters with banks and investment houses despite the loss of banking secrecy rules that helped propel its transformation from a bastion of coal and steel in the years following the Second World War.

After Brexit “it will be crazy,” Jose Pedro Fernandes says. The 56-year-old taxi driver moved to Luxembourg from Portugal 15 years ago and earns a living transporting financial workers around the jammed capital that lacks a subway and suffers from inadequate bus services.

Traffic congestion has become “unbearable,” according to Fernandes, because of construction sites everywhere to create a new tram line and a wave of new office buildings that can be seen popping up in and around Luxembourg city, the capital of by far the EU’s richest state.

In March AIG said it will open an operation in Luxembourg following the UK’s vote to leave the European Union. FM Global, a US insurer, and Hiscox, the Lloyd’s of London insurer, and Blackstone, a private equity firm, also chose Luxembourg as their new EU hub. JPMorgan this month said it plans to move hundreds of London-based bankers to expanded offices in Luxembourg, Dublin and Frankfurt.

Luxembourg remains the world’s largest fund market after the US and its swift adoption of EU laws and rules for so-called passporting fund administration and other services have swelled assets under management at its banks. Passporting is a massive draw post-Brexit because it allows foreign firms authorised there to do business in the rest of the soon-to-be 27-nation bloc.

Liver Dumplings

Culturally and socially, Luxembourg has been trying to adapt to the growing demands of its wealthy population and a likely influx from the UK capital. Celebrity artists now regularly pay a visit and, unlike in bigger cities, it’s still easy to snap up a ticket for shows.

Well-paid bankers and their families won’t starve. What Luxembourg lacks in sandwich bars it makes up for with 11 Michelin starred restaurants often serving regional delicacies such as black pudding and liver dumplings washed down with pinot gris.

Still, Luxembourg is light years behind London when it comes to things to do and places to hang out. The UK capital was last year ranked best city in the world for quality of life, ahead of Paris and New York, in a PricewaterhouseCoopers survey.

“There’s no atmosphere in the city in the evening,” Chris Edward, the UK country manager at Lombard International Assurance, admits. Nevertheless, he says, he likes being one of the 590,000 people crammed into the EU’s second smallest nation: “Where I live locally, it’s totally different.”

Million-Euro Homes

Luxembourg’s house price index grew 5.6 per cent in the second quarter of last year on the previous year, according to Statec, the country’s statistical office. In 2016, the average price for existing apartments was €4,613 (£3,986) per square meter, and €594,379 for a family house.

The data doesn’t show the full picture, since high quality family homes with two or more bedrooms close to Luxembourg city, are often priced at or above €1m.

In a different pay league to the new wave of immigrants, Fernandes can’t afford to live centrally anymore. His home now consists of a room in the northern town of Clervaux, more than an hour’s drive away from the centre of Luxembourg.

While renting or buying a house in the centre costs too much for many, others who crave a bigger place in the countryside must also pay a price – a tortuous journey from neighbouring Belgium, France and Germany. That means dodging long lines of Porsche 911s and Audi station wagons is already a daily ritual for the hordes of white collar workers.

Benoit Wtterwulghe, the chief executive officer of ABLV Bank Luxembourg SA, is one of a constantly rising number of 177,000 people commuting in and out of Luxembourg every day.

Wtterwulghe, 47, moved here from neighbouring Belgium almost 20 years ago. Having lived in Luxembourg for a while, he, his wife and their three children decided to move back to Belgium, just across the border, where they found a bigger house with a garden.

Early starts

“We are only a few hundred metres from the border, but the price is 10 times cheaper,” he says. “It’s quite tough with all the traffic jams. Sometimes I leave very early, but you need to cross the border before 6.30am. Or, I start to work from home and get in a bit later.”

Even though no one knows exactly how many people will head to the nation, Luxembourg for Finance, the agency for the development of the financial centre, estimates that Brexit could create some 1,000 local jobs. According to realtors, prices are already under pressure due to current demand exceeding supply.

“Finding good accommodation here is becoming the real issue,” Wtterwulghe says. “It’s not just the price. You also need to grab a place during your first visit, or it’s gone.”

Wtterwulghe is skeptical that Brexit will attract thousands of people to Luxembourg. Still, the number worries him, he says, because “even 100 people make a difference. Luxembourg is small and there’s not a huge stock” of available real estate.

Those staying closer to the centre may have fewer square metres and may have to forgo big backyards. But the payoff is being able to get to and from Luxembourg’s beautiful heart, part of which is a UNESCO World Heritage site, in just a few minutes.

That’s a welcome contrast to London for Helen Cranmer, 34, who moved to Luxembourg two years ago after her partner joined the 1,500 strong workforce at Amazon. “The quality of life here is just so much better,” says Cranmer, who lives in one of the most sought-after and family-friendly city districts. “We can walk to town in 15 minutes. That’s super convenient.”

Luxembourg’s internationally oriented schools, many of them free, are another big plus for parents wanting multilingual kids, says Nicolas Mackel, the chief executive officer of Luxembourg for Finance.

Multilingual kids

They are “a unique opportunity” for anyone looking to move over with their families, to have their kids schooled in German, French and English, not to mention the local language of Luxembourgish. “You can’t find that anywhere else,” Mackel says.

Luxembourg “has the capacity to further adapt, should there be an increase in demand,” says Myriam Bamberg, a spokeswoman for the education ministry. The International School of Luxembourg, one of several private schools, is monitoring the Brexit situation, saying that families coming to Luxembourg get priority over those who apply locally.

For those with younger children the situation could be trickier, as daycare centres are becoming scarce, according to Julien Pillot, the head of office at real estate group Inowai.

Demand for spaces that can accommodate new daycare centres has gone up massively in recent years, he says. “Daycare centres need to be able to afford the high prices, but also find a place that meets all the norms in terms of security, ideally with a garden, or a park nearby, and there’s just not enough around,” he says.

Pros and Cons

Despite his moans about the lack of nightlife and the traffic jams, Lombard’s Edward also reckons the pros of life in Luxembourg outweigh the cons.

He came over at the age of 21 when he was still dreaming of a career in London or Zurich. He never thought he would end up in Luxembourg. “It was like, what am I doing here?”

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But Luxembourg grew on him. He now would “definitely not” be happier living in London, he says. Edward lives near the country’s wine region – alongside the river Moselle, which borders Germany. After another trip to London and a journey on a crammed tube train in a suit with a suitcase in hand, he is happy to come home to this.

“I like the lifestyle here. I get in my car, or I can get on my bike and just cycle along the Moselle and look at the vineyards. It’s very scenic, very beautiful.”

If that isn’t enough, there’s another consolation for homesick bankers who just can’t stay away from their old haunts.

From as little as €9.99 each way, flights back to London with Ryanair and EasyJet are often cheaper, if not quicker, than the extortionately priced taxis to Luxembourg’s squeaky clean airport.