Mortgage brokers and estate agents have reported increased demand from Hong Kong buyers following new security laws in the region as well as UK stamp duty changes, low interest rates and a weak pound.
Estate agents Chetertons says that the ongoing tension between Hong Kong and China resulting in Boris Johnson’s offer of British citizenship to three million of the city’s residents has boosted London’s appeal.
It says that between June 1 and July 7, the number of new buyers from Hong Kong registering with Chestertons more than doubled compared to the same period last year.
Chestertons’ data also shows that these buyers are expanding into areas that have not previously appealed to Hong Kong investors.
Previously buyers have looked at higher yielding areas such as Canary Wharf.
Recent interest has been more focused on family homes for people thinking of relocating.
South west London and central London have seen enquiries from Hong Kong buyers rise by 53 per cent compared to last year.
In the last four weeks in Putney, where there has traditionally been almost no interest from Hong Kong buyers, Chestertons has registered numerous new buyers.
Elsewhere in west London, 75 per cent of the apartments released in the first phase of a new development were reserved by Hong Kong buyers within a matter of weeks, although these were mainly for investment.
Chestertons’ managing director Guy Gittins says: “Given the close historic ties between Hong Kong and the UK, London has always been popular with Hong Kongers as a place to visit, invest and educate their children.
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“However, the current situation and uncertainty in Hong Kong has caused many to look at London property as a ‘safe haven’ investment, while the stamp duty holiday and the weak pound are added attractions.”
The surge in interest has also been noted by mortgage brokers.
Altura Mortgage Finance managing director Rob Gill says “There is certainly an increased interest in all things UK among Hong Kong residents at the moment.
“We are seeing an increased number of enquiries from potential Hong Kong buyers both directly and via our network of professional introducers.
“From a practical point of view however, few people move continents and buy a new home straight away, they are more likely to rent for a year or two before taking the plunge.
“We’re having plenty of conversations with sensible clients who want to understand their options and increase their chances of getting a good mortgage deal when they are ready to buy.”
Private Finance mortgage consultant Chris Sykes says: “Expats who may have been considering purchasing a UK property – either with the intention of using it as their main home in the long-run, as a holiday home or as an investment – may be encouraged to push ahead with purchases as a result of declining house prices and changes to the stamp duty threshold.
“We believe we will see more overseas buyers and expats looking to purchase UK property in the coming months.
“We have also seen a particular increase in mortgage enquiries from Hong Kong residents since the implementation of the new national security law.
“This sudden rise in demand is likely to continue to increase as the situation develops.”
By Leah Milner
Source: Mortgage Strategy