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Prime London market the busiest it has been for ‘over five years’

The Prime Central London (PCL) property market is the busiest it has been for over five years, according to estate agency Dexters.

The firm, which has a larger presence in the heart of the capital than any other agency, reports that the number of sales agreed for properties priced over £2 million between mid-June and mid-August was 85% higher than the same period last year.

Meanwhile, lettings transactions for properties costing over £1,250 per week were also up 41% compared to the same period in 2019.

Overseas interest in prime London properties is being driven by purchasers from Hong Kong, the United Arab Emirates (UAE) and India, while domestic applicants commonly work in the finance or law industries.

Dexters says that all buyers are keen to purchase homes with outside space. Apartments with large balconies or terraces, low rise houses and mews properties with gardens are attracting the most interest at the moment.

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Prime London buyers are also currently willing to pay a premium for homes which have their own private entrance instead of a shared hallway.

The most popular addresses in recent weeks, according to Dexters, are: Mount Street and Grosvenor Square in Mayfair, the ‘Old Chelsea’ addresses of Cheyne Row, Upper Cheyne Row and Glebe Place, Marylebone Village, Old Queen Street and Queen Anne’s Gate in Westminster, Warwick Square, Ecclestone Square and Moreton Place in Pimlico, and South Kensington’s Onslow Gardens and Cranley Gardens.

Alongside, Hong Kong, the UAE and India, overseas interest is also strong from buyers in Singapore, the United States and Italy, with Dexters saying that over 80% of overseas investors are cash buyers.

The most popular property with foreign buyers is currently a spacious two-bedroom apartment with an outside terrace, located in an apartment building with a hotel-like concierge or porter. Overseas buyers are also keen on properties that have living spaces closer to the entrance, with the bedrooms beyond and a separate, rather than open-plan, kitchen.

According to Dexters, whether overseas or domestic buyers, the typical prime London apartment purchasers are couples without children in their 30s or 40s, or mid-to-late 20s buyers with help from the ‘Bank of Mum and Dad’. Buyers of houses, meanwhile, are more likely to be late-30s to mid-50s parents with one or two children.

“Due to the pent-up demand that surfaced after the lockdown and people choosing to holiday in the UK this year rather than overseas, there is a particularly strong market this summer,” says Richard Page, Dexters’ marketing director.

“All the activity we are currently seeing gives us every confidence about the outlook for the Prime Central London property market.”

By Conor Shilling

Source: Property Investor Today

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Benham and Reeves: Foreign buyers should invest in UK property now

With the temporary changes to the stamp duty threshold in place until March 2021, and a 2% surcharge for foreign buyers set to come in from April, now is the time for overseas buyers to invest in UK property, according to Benham and Reeves.

The current stamp duty holiday means that foreign buyers are able to save £14,573 on the average London property purchase.

The April 2021 surcharge will take the average the cost of stamp duty up to £38,579.

For foreign buyers making their move now, this means an additional £24,006 saved in addition to the sum already wiped off by the stamp duty holiday.

Kensington and Chelsea offers the most significant additional saving for foreign buyers transacting at the moment; the cost of stamp duty on a current purchase has reduced from £125,243 to £110,243, a saving of £15,000.

Come April next year, this stamp duty requirement will climb to £153,165 with the additional foreign buyer surcharge, so international buyers transacting before this are saving a further £42,922.

Similarly, foreign buyers looking to buy in Westminster can save £36,699 by transacting now, while Camden (£32,621), Hammersmith and Fulham (£29,943) and Hackney (£27,773) were also found to offer some of the best savings.

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In the last year, house prices in the City of London have fallen by £60,868 on average; combined with the £30,851 stamp duty saving made by buying now, foreign buyers would be £91,720 better off on average at present.

In Brent, a £28,463 reduction in property prices coupled with a £21,287 stamp duty saving means that foreign buyers would be £49,750 better off buying now.

Richmond has also seen property prices decline by £12,875 in the last year; with the addition of a stamp duty saving of £27,670 ahead of April’s surcharge, foreign buyers would be £40,545 better off on average as a result of buying now.

Marc von Grundherr, director of Benham and Reeves, said: “The recently implemented stamp duty holiday has not only rejuvenated domestic buyer demand, but we’re also seeing foreign buyers starting to return to the capital in their numbers. In fact, the vast majority of our buyer interest coming from Asia has only been concerned with homes falling under the £500,000 threshold.

“This has been intensified due to the sour taste of a two per cent stamp duty surcharge on the horizon as the government continues to dampen what is a vital sector of the London property market.

“In any case, the stamp duty savings currently on offer have been heavily bolstered by the additional saving made in comparison to buying from April next year and this has caused an immediate uplift in buyer demand from foreign shores.

“Great news for developers who with stock currently, or due to hit the market in the coming months.

“What’s more, some boroughs have seen property prices reduce over the last year and so foreign buyers are not only able to save considerably where stamp duty is concerned, but they’re securing even better value in terms of the price of the property itself.

“London remains the pinnacle of homeownership for many foreign buyers, and while a ramped-up level of stamp duty will be hard to swallow, it certainly won’t deter buyers in London’s high-end market.

“However, with many rushing to make the most of the savings currently on offer, any negative price trends that have plagued the capital in the last 12 months are sure to be short-lived as demand starts to outweigh supply.”

By Jessica Bird

Source: Mortgage Introducer

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Stamp duty changes spur rise in interest from overseas buyers

Mortgage searches by advisers around visas and non-UK residents has seen a significant rise according to Legal & General Mortgage Club. Data from the SmartrCriteria tool, which helps advisers to determine whether a particular lender would consider a mortgage application from their client, shows that criteria searches related to ‘visas’ were ranked as the most searched term at the end of July.

Throughout July, mortgage searches by advisers for ‘expats not in the UK’ also featured in the top 10 search terms, whilst a search combination of ‘expat not in the UK’ and ‘foreign income’ has remained in the top five searches by advisers. According to the data, one in every 22 residential searches is for a query relating to an applicant currently on a visa or an expat not based in the UK.

The data also suggests that a growing number of overseas buyers are also reacting to recent changes to stamp duty, which include a 2% surcharge for non-UK buyers beginning in April 2021. SmartrCriteria searches related to applicants on a visa showed a 146% for buy-to-let searches, as well as 97% for residential criteria enquiries since May 2020. Of the residential visa searches made in July by advisers, 88% of applicants have a Tier 2 or other working visa and the majority (71%) have been in the UK for two years or more.

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The rise in visa-related enquiries coincides with increased interest from Hong Kong-based buyers as they turn their attention to the UK housing market. Recent industry data has shown a surge in demand from Hong Kong based buyers, which could grow further following the Government’s announcement on 22nd July of a new route to citizenship for 300,000 British National Overseas passport holders.

Kevin Roberts, director at Legal & General Mortgage Club, said: “Britain’s housing market is bucking the trend and has faced unprecedented levels of demand since reopening in May, and now figures show that a growing number of overseas buyers are also taking interest in UK property. Our SmartrCriteria tool is tracking some of the key industry trends in the mortgage market’s new normal and shows recent announcements from the Government have clearly gained the attention of non-UK based buyers. Many are now looking to take advantage of the stamp duty holiday while also investing in the market before the 2% surcharge for overseas customers takes effect.

“Our latest figures also coincide with increased interest from Hong Kong buyers, who are now looking to the UK housing market as a ‘safe haven’ amidst political uncertainty in the territory.

“There is an opportunity for advisers to support many of these buyers, particularly if they have little to no credit history in the UK. Lending criteria is changing every day in the mortgage market at the moment, and advisers will be key in helping these borrowers and others to cut through the noise and find the best product for their particular circumstances.”

Source: Property Wire

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London sees surge in demand from Hong Kong buyers

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

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Expat buy-to-let enquiries surge following stamp duty changes

One week after the Chancellor announced a stamp duty holiday on the purchase of property in England, Skipton International has reported a sharp increase in its buy-to-let mortgage enquiries.

The buy-to-let lender says UK expatriates and foreign nationals have been quick to register their interest in investing in UK property to let, with the bank experiencing enquiries at double the value of usual business.

In the seven days following that announcement that stamp duty would be waived on all English properties up to the value of £500,000, Skipton has reported a 61% rise in usage of its online mortgage calculator for UK buy-to-let mortgages estimates.

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Jim Coupe, managing director of Skipton International, said: “This initial response to the new stamp duty measures is very encouraging and demonstrates that the changes are driving more interest to the UK property market. We have always seen the UK buy-to-let market as an extremely important area of our business and are anticipating that many of these enquiries will convert to successful mortgage applications in the coming months. As a responsible lender we have to be mindful of prevailing circumstances but will be doing whatever we can to assist buyers in their search for long term investment property.

“Now could be a good time for overseas purchasers to consider investing in UK property, with the stamp duty holiday due to last until 31 March 2021, at which time a proposed additional 2% stamp duty land tax charge for foreign residents will come into effect. This window of opportunity could offer substantial savings with those buying a property priced at £500,000 generating savings of up to £25,000.”

By ROZI JONES

Source: Financial Reporter

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London is still calling to international investors

With flights grounded and uncertainty hanging over the global economy, it would be easy to think that foreign buyers have paused their activities in London’s property market.

Yet despite the fallout from the Covid-19 pandemic, deals are still being done. As a buying agent for overseas investors, we’ve exchanged on several prime residential properties and a commercial unit in the capital since the lockdown was introduced.

Like many businesses, my team at PSS London – a property consultancy firm dedicated to securing both residential and commercial opportunities – has had to close its offices in London and Istanbul during this period. But we have made the most out of a tricky situation by attending industry webinars and running Zoom meetings between clients, solicitors and bankers.

Since Britain entered lockdown, we have been hitting the phones every day to give our clients market updates and to keep them informed about the London property market, both in terms of its housing market and its commercial one. Given many of my clients are thousands of miles away and unable to travel to London any time soon, feeding them the right information and keeping their trust has been more important than ever before.

Even with all the current unknowns, if clients trust you and know you are bringing them a good deal, they are often happy to press ahead with their plans

Even with all the current unknowns, if clients trust you and know you are bringing them a good deal, then they are often happy to press ahead with their plans.

To find out more about how we can assist you with your Expat Mortgage requirements, please click here to get in touch

In fact, we think that this period is a great time to negotiate a deal. Buyers that we are advising now have the full attention of many developers that are bringing new-build homes to market. Before this crisis, many senior management teams were too busy to fit in meetings with clients, but we can often get them involved now as they have more time and everybody is desperate to do some deal-making.

Looking forward, in the residential market I think there will be a ‘discovery’ stage where both buyers and sellers will wait and collect more information before working out where they stand on pricing.

Blockbuster deals

In recent years, we’ve completed some blockbuster deals in London’s residential market, from units at One Tower Bridge to apartments at 199 The Knightsbridge.

I believe this fundamental demand we have seen in the past is not going away. Buyers remain financially buoyant and there will be a real eagerness to snatch up a great investment opportunity.

As an agency business that looks after overseas investors, our position will remain the same over the coming three to four months: we will continue to actively promote deals remotely until international flights operate as normal and the universities are fully open in the UK.

It is not just the residential markets where there are bargains to be found. One of the biggest opportunities coming out of this crisis will be in London’s commercial property sector. We are expecting investment volumes in this space to fall to the kind of levels that we have not seen since the financial crash of 2008.

However, there will be fewer corporate buyers on the market, and this will create good opportunities for individual buyers and family offices. Clients will not need to compete against as many pension funds when trying to buy assets and there will be more time to digest and analyse the commercial deals coming through the process.

Sectors that were under pressure prior to the current crisis will remain under pressure, and we do expect to see more bank-led sales of retail assets as distress on the high street continues to mount.

Having in-depth expertise in the UK’s commercial property market is crucial, especially as values at the moment are difficult to determine. We are regularly updating our clients with new listings that have the potential to generate high returns on investment, whether small retail units or larger mixed-use blocks.

Commercial prestige

In 2012, we acted for a private investor who snapped up a trophy virtual freehold retail unit at London’s exclusive One Hyde Park development (pictured). This was resold in 2019 with a healthy profit. We’ve also acted on two large commercial deals in nearby Mayfair, both for circa £40m, in 2017 and 2018 respectively. These sorts of deals don’t come around every day, but with London still viewed as one of the world’s safest and most popular cities, we’re expecting famed districts such as Knightsbridge to keep their commercial prestige in spite of the current volatility.

It has undoubtedly been a tough few months for real estate. But we should not forget that the lockdown was introduced shortly after the news that Britain was definitely leaving the EU following the government’s decisive election victory. The election result meant we were all hoping for and expecting a good recovery in the property sector.

Unfortunately, this pick-up didn’t really happen, and just as we hoped for activity to return to the market, the Covid-19 pandemic disrupted all parts of the global economy. But after almost four years of Brexit-related uncertainty, many buyers and sellers are fed up of sitting on the fence. Lots of them are already near to closing deals and securing opportunities. It is still going to be a time-consuming process, but the motivation is there.

Information is everything. As the UK government gradually starts to ease lockdown measures, overseas investors will need to be kept in the loop when it comes to mortgage consultation, legal guidance, immigration rules and the general market outlook. Buying agents such as myself will look to use our experience and insight as much as we can.

Despite all the difficulties of the past few months, we at PSS London are coming out of this period with a positive outlook. For overseas investors, London’s fundamentals are as strong as they always have been, whether it’s the education system, the rule of law or even the open green spaces across the capital. There has never been a better time for buyers and their agents to search for new opportunities.

By Emre Bilgin

Source: Property Week

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Overseas investors double share of property in Scotland since last financial crisis

The share of overseas investment in Scottish commercial property has doubled since the last financial crisis, according to Colliers International.

The real estate advisor said finance had flooded in to the country from Middle East and Asian investors seeking stable assets and from many in mainland Europe in search of value for money.

Colliers’ report, Regional Revolution III, Rise of Cross Border Investment, 2020, compared inflows to the market between 2002 to 2006 with the period from 2014 to 2018.

Overseas investors’ share of the Scottish market grew from 19% to 41%. Investment increased from less than £250 million in 2002 to £1.25 billion in 2016.

Oliver Kolodseike, an associate director with Colliers International, said: “Looking at what attracts overseas investors to Scotland, the country benefits from fairly competitive pricing, while still being a transparent and relatively stable market, compared to other parts of the UK and Europe.

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“It also enjoys strong occupational demand in the office sector, has an educated workforce, leading universities and low unemployment.”

Colliers reports that the sector in Scotland was attracting increased interest this year until the lockdown brought transactions to a near halt.

Investment in commercial property for the first quarter of 2020 was double that of the same period last year, the firm said. Last year, total investment topped the £2 billion mark for the sixth year running.

Between 2002-2006 and 2014-2018, Colliers found, Irish investors largely withdrew from the UK regional market while money increased from Asia, the Middle East and other parts of Europe.

Kolodseike said the fallout from the last financial crisis, plummeting oil prices between 2014 and 2016 and political uncertainty had contributed to a slump in the domestic share of investment.

He added: “A large part of Scotland’s tax revenues comes from oil and a falling oil price deepens Scotland’s fiscal deficit. The fall in oil prices and the independence referendum had a downward effect on overall investment volumes in Scotland.

“While these factors contributed to a degree of hesitation among domestic buyers, cross-border investors increased their exposure to the market. Loose global monetary policy, a weak sterling and competitive pricing, compared to other markets, also contributed to the attraction of foreign buyers.”

Last year, investment included the £27 million acquisition of Centrica’s HQ in Edinburgh by Dubai-based BLME/Darin Partners, the £55 million acquisition of the Sauchiehall Centre in Glasgow by 90 North and Saudi firm Arbah Capital, and the £22 million purchase of Technip HQ in Aberdeen by Black Sands of Bahrain.

Korea is also a major player. Unnamed investors bought the Leonardo Innovation Hub at Edinburgh’s Crewe Toll for £100 million, and Glasgow’s 110 St Vincent Street. Hyundai Asset Management acquired an NHS base at Gyle Square for £55 million, while Mirae Asset Global Investments bought Morgan Stanley’s new headquarters in Glasgow.

In May, one of Germany’s largest pension funds bought the Aberdeen Standard HQ at St Andrew Square, Edinburgh, for £120 million.

US investor Blackstone bought Eurocentral warehouses Colossus 1 and Colossus 2 for £16 million in February this year, while CBRE acquired the nearby BrewDog Hop Hub for £10 million last November.

Colliers predicts the commercial property market will recover from Covid-19 because large investors such as pension funds need long-term, secure income streams.

Patrick Ford, Glasgow-based director of national capital markets, said: “Overseas capital continues to dominate the Scottish investment market. We are aware of circa £250 million of offices that are currently under offer in Glasgow and Edinburgh to Far Eastern investors. First into the pandemic and first out may see Asia back in the market sooner than, for example, Europe.”

By Hamish Burns

Source: Insider

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Hong Kong and Chinese investment in London properties soars to new levels

According to up-market estate agency, Beauchamp Estates, Hong Kong and mainland Chinese investment in luxury Prime Central London residential property has soared to new levels, despite the global COVID-19 pandemic.

This group now accounts for 15% of international buyer home sales above £1million across pime central London and 20% of deals above £10 million.

The figures could to go higher with the proposed Hong Kong visa changes set to open the door to UK citizenship and further property investment for thousands more Hong Kongers.

Since the UK General Election of 12th December 2019 Beauchamp Estates has sold over £300 million worth of luxury London residential property to Hong Kong buyers in locations including Knightsbridge, Belgravia and Islington.

In rank order their largest groups of overseas clients investing in London luxury property are Chinese/Hong Kong buyers followed by Russians and Indians.

Last year the Office for National Statistics (ONS) data shows that Hong Kong and mainland Chinese buyers invested £7.69 billion in London property including over £750 million invested in residential property in the City of Westminster and the Royal Borough of Kensington & Chelsea.

ONS data shows that there are now some 218,975 properties in London owned by Chinese/HK buyers comprising 98,725 owned by Hong Kongers and 120,250 by mainland Chinese making London property the most popular investment destination for Chinese capital in the world.

Beauchamp Estates says that there are five distinct types of Chinese investors purchasing property in London.

The first group are purchasing one and two bedroom new build rental-investment apartments priced up to £2 million in locations including Canary Wharf, the City, Islington and the River Thames in Battersea, Chelsea and Fulham.

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The investors are looking at a 3-5% yield and often purchase off-plan and in bulk in order to gain a price discount/advantage.

The second group of buyers are affluent upper middle class Chinese and Hong Kong families typically spending between £5 million to £10 million for a London family home/luxury pied-a-terre in locations including St John’s Wood, Marylebone or Regent’s Park or £750,000 to £1.5 million for an apartment in Aldwych, Soho or Fitzrovia for their student offspring studying in London.

For these middle class families proximity to a good school or university is paramount and they like Marylebone and St John’s Wood because both are close to the Chinese Embassy at 49-51 Portland Place around which the Chinese political elite working in London are based.

The third buyer group are mainland China and Hong Kong’s super-wealthy business elite who will spend upwards of £15 million on a trophy property, typically something with a prestigious history or ultra-luxury design, located in London’s most prestigious addresses.

Beauchamp Estates say that this elite group prefer to buy either mansions in Knightsbridge, Mayfair, Belgravia or Avenue Road in St John’s Wood priced from £25 million to over £200 million or penthouses in trophy apartment buildings such as Clarges Mayfair, One Hyde Park, 20 Grosvenor Square or No.1 Grosvenor Square priced from £20 million up to £80 million.

The fourth buyer group are China and Hong Kong’s large corporations and property developers.

These corporations either invest in commercial property in the City, Canary Wharf or West End, or undertake direct or joint venture residential projects in the UK capital.

Over 40% of London’s office investment deals by international firms over the last two years have been done by Hong Kong corporations including CC Land, CK Asset Holdings, Nan Fung Group and Sino Group.

Beauchamp Estates observe that in addition, Chinese property corporations have undertaken joint ventures with domestic London developers examples include Sun Hung Kai Properties with Ballymore, Vanke with Galliard Homes and CC Land with Finchatton.

The fifth buyer group are Chinese Sovereign Wealth entities such as CIC which has been a major investor in London real estate.

Gary Hersham, Founding Director of Beauchamp Estates says:

“Since the 2019 General Election we have sold over £300 million of luxury London residential property to clients from Hong Kong.

“Over the last 12 months mainland and Hong Kong investors have become the leading overseas buyer group purchasing luxury London property and their dominance in the market has grown despite the COVID-19 pandemic.

“There are five different types of Chinese investor in the capital but sometimes these groups overlap, for example a large Hong kong corporation buys commercial property in the City, followed by the CEO buying a £100m mansion in Belgravia.”

“The Chinese believe that living on high ground or in homes where you are elevated above others brings good fortune, hence their preference for penthouses or landmark buildings.

“For the Hong Kong super-rich buying a trophy London mansion or penthouse is good for their personal profile, generating columns of profile boosting PR in traditional media and a storm on social media.”

Marcus O’Brien of Beauchamp Estates Private Office says:

“Wealth creation and the development of the property markets in Europe has taken 200 years, in China the same process has taken just 20 years.

“This huge acceleration of wealth creation and property development in China – some cities take just six months to construct – has provided China and Hong Kong with a “new money” middle class and a new money super-rich elite.”

“Because China’s wealth is so new, Chinese and Hong Kong buyers in London like purchasing either new homes or historic properties which have newly refurbished super-luxury interiors.

“The Chinese middle class life is focused around family whilst the business elite have a very consumer-concentric culture, they need to be seen to be successful when benchmarked against their peers, so if one buys a London property a business rival needs to acquire an even better one.”

Beauchamp Estates highlight that because of the poor Chinese bilateral relationships with the USA, Canada and Australia where the Chinese/Hong Kong elite would have formerly purchased property in Malibu, Los Angeles, the Hamptons and Toronto they have now retreated from these locations and prefer to invest in London.

Overseas buyer tax rates in Canada (20%) and Singapore (20%) are much higher than London and mainland and Hong Kong buyers often await getting UK residency visas before buying homes, thereby avoiding additional Stamp Duty.

Source: Property Industry Eye