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Overseas investors ‘gearing up for return to UK property market’

More overseas investors could be poised to enter the UK property market following the disruption caused by the coronavirus pandemic, figures from an estate agent suggest.

Knight Frank said its web traffic data showed nearly a quarter (24%) of users looking at sales and lettings properties in August were based abroad.

This was the highest number since its figures started in January 2020. The average proportion in the 18 months to June was 17%.

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The number of international web users looking at lettings properties in August also exceeded those based in the UK for the first time since the start of 2020.

Demand has been driven by overseas students acting before the start of the academic year and returning corporate tenants as offices reopen, Knight Frank said.

Tom Bill, head of UK residential research at Knight Frank, said: “As the feeling grows that the worst of the pandemic is behind us, normal service will resume in the UK property market and I expect overseas investors and tenants to make their presence felt in the final quarter of this year.”

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By Vicky Shaw

Source: Independent

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Overseas Property Investors Conclude the Best Potential Sits Outside of London Property Market

For years, overseas property investors have concentrated mainly on the London property market. However, this is beginning to change. Indeed, Hong Kong and Saudi Arabia investors saw the potential in the regional markets outside London and have taken advantage of excellent price gains since 2020.

For the last 30 years, overseas property investors have pumped money into the London property market. Lots of jobs, a robust economy, and a booming property market made it an obvious choice.

But across the country, a similar story is emerging. Investors evaluate the property market searching for value and conclude that Manchester, Newcastle, and Leeds offer great potential.

Where are Overseas Property Investors Investing Outside London?

Between April 2020 and April 2021, home prices across the UK increased by 8.9%. In London, properties appreciated by 3.3%. However, in the northeast of England, house prices rocketed up by 16.9%.

But it’s not just appreciation rates that are making investors sit up and take notice. London house prices are twice that of the national average. In a pre-pandemic world, these discrepancies could be justified by proximity to employment. However, several factors have changed the game.

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Work-from-home has caused buyers to exit London in search of properties with more space. With fewer people obliged to commute daily, suburbs and regional cities are more appealing.

Meanwhile, successive governments have committed to a policy of decentralisation. While much of this process involves granting power to local governments, there are grants to encourage companies to set up regional offices. Indeed, Goldman Sachs announced a technology centre in Birmingham this April.

Where are Overseas Property Investors Going?

The majority of overseas property investors are focused on private homes for rent, particularly homes for young professionals. The business model is relatively straightforward: develop the property and keep the asset for rent, or sell it on, generally within Asia.

According to Savills, the combined investment into the property market in Manchester, Birmingham and Leeds was over £1bn in 2020. This figure constitutes a staggering £630m growth in two years. Better yields offered in the regions are one of the most significant factors in these increased investment flows.

Indeed, as long as regional cities offer better investment opportunities, the pattern will continue. Many major UK banks and finance are not interested in regeneration because of the risks involved. Without the help of overseas property investors, the UK’s housing shortage would be much worse.

Conclusion

For investors, finding opportunities outside London is producing higher yields. For many professionals, work from home is here to stay, which will allow a more flexible approach to buying housing in different areas.

With many cities around the country benefiting from the work of overseas property investors, other cities have begun to take note. With many areas in need of regeneration, these investment flows could be precisely what the country needs.

Written by Kelly Geeson

Source: Property Forum

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UK’s Expat Demographics & Latest Mortgage Trends

Introduction

As of 2019, people born outside of the UK – typically referred to as expatriates or expats – made up around 14% of the UK’s residents. That adds up to just under 10 million people. Now, all of these people need somewhere to live, so there is a lot of movement in the UK expat mortgage market every year. At the same time, many of these expats come with a fair amount of money in the bank, and UK property has long been seen as a sound investment. As a result, the number of expat buy to let mortgages on the average expat mortgage broker’s books has been rising steadily.

But what do we know about these expats? Where are they coming to the UK from, how are they affecting the UK’s demographics, and how are they coping with a mortgage market that is reeling from both Brexit and COVID?

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Overview of Expat Mortgage market

Expat Mortgage Brokers, banks and other property market professionals are seeing growing interest in expat buy to let mortgages and UK expat mortgages generally. Brexit may have cooled the desire for EU citizens buying 2nd homes in the UK, but it has done nothing to discourage EU nationals, whether expats, expat-hopefuls or not, to buy investment properties in the UK.

There are many reasons for this. The pound is weak relative to many major world currencies at the moment, and those whose currencies are more bullish – expats and investors from East Asia, Canada and the US, among many others – are eager to take advantage of that. After all, when the pound recovers, the value of their investment in their own currencies will rise dramatically. Overall confidence in the UK’s COVID vaccination program and economic recovery are high.

Other factors driving demand for UK expat mortgages and expat buy to let mortgages include the political troubles weakening China’s markets and the UK’s new Visa scheme, which allows BNO passport holders from Hong Kong to relocate to the UK easily.

Specialty Expat Mortgage Brokers are seeing a sharp increase in demand

Many mortgage brokers, banks and financial professionals who specialise in serving clients who work primarily in non-GBP currencies or who hold primarily offshore assets have seen a spike in interest beginning around January or February and continuing into the summer.

Some expat mortgage brokers have reported 3 times as many Hong Kong-based expat buy to let mortgage completions in the first quarter of 2021 than in a typical first quarter. Specialty expat mortgage brokers are seeing a corresponding increase in interest. It is not uncommon for enquiries for Residential Expat Mortgages and Expat Buy to Let Mortgages to have doubled recently, even discounting the extra interest from Hong Kong. Many tell us that even EU mortgage inquiries are on the rise, with around 30% more interest from that region in the last 6 months compared to the 6 before that.

Expat mortgage clients need special support, as it can be tricky to find lenders who are happy to accept payments that aren’t in sterling, or who have the necessary expertise to appreciate the value of offshore collateral.

Beyond Hong Kong, Expat Mortgage Brokers are seeing a lot of East Asian interest

Many overseas buy-to-let and residential expat mortgage specialists have reported year-on-year increases of 10% to as high as 20% from East Asian property buyers. Part of the reason for this is a kind of ‘perfect storm’ effect between London property prices actually falling by 3.4% across 2020 (measured in GBP) and the strength of their own currencies.

Over the course of 2020 a South Korean expat mortgage customer would have seen an effective 6.8% fall in London housing prices in their own currency. The price of an expat buy-to-let mortgage in Chinese yuan fell by 6.2% over 2020. Likewise, the price in Japanese yen fell by 5.6%

There have also been quite a few enquiries about UK Expat Mortgages from property buyers in Canada and the United States. Contrary to what many experts had predicted following Brexit, many expat buy to let mortgage customers in North America seem to feel that the UK is a more attractive place for property investment than the EU.

 A large amount of Expat Mortgage interest comes for UK nationals living overseas.

Another growing source of expat mortgage customers are UK citizens currently living abroad and paid in foreign currencies, but prefer to invest in UK properties. Many UK expats live in places like Germany, Paris, the UAE or the USA, and wish to invest in UK property on a Expat Buy to Let basis or wish to buy a home for family members who do live in the UK. There is an especially high amount of interest at price points around £500,000. Many expat mortgage professionals also report a growing interest in buying flats, which had begun to fall out of favour early in the pandemic.

Because these customers are not paid in sterling, though, they have discovered that they need to seek out specialist expat mortgage brokers like Expat Mortgages UK.

Who are these Expats and where are they coming to the UK from?

There are more people who were born overseas living in the UK now than ever before. Even after Brexit, there has been a steady increase. In 2004, some 5.3 million UK residents were expats. That number had nearly doubled to 9.5 million in 2019. The growth of the UK’s foreign-born has slowed since around 2016 when many began emigrating, but the overall figures still indicate substantial growth.

Brexit has been responsible for a demographic shift, of course. The last decade had seen EU-based immigration rising more rapidly than immigration form other countries. However, the majority of UK immigrants came from non-EU countries, and Brexit has done little to slow it. In 2019, for example, around 38% of UK immigrants came from the EU.

Compared to the native-born UK population, immigrants tend to be in the 26-64 age range. As of 2019, 70% of immigrants fell into this ‘working’ age category, whereas only 48% of UK born residents did.

Around 19% of UK natives were age 65 or older, whereas only 11% of migrants were. However, this varies substantially with country-of-origin. 17% of EU-14 immigrants were age 65+, but only 1% of those from Bulgaria and Romania were 65 or older.

At the other end of the spectrum, the demographics are more similar. UK natives aged 16-25 make up 12% of the population, and 11% of the immigrant population. Again, this varies by place of origin. Some 15% of EU-8 and EU-2 immigrants were younger, whereas only 5% of immigrants from India were aged 16-25.

Where do Immigrant Expats come from?

As of 2019, the last date we have good figures for, most of the expats coming to live in the UK came from either India, Poland or Pakistan. India contributed around 9% of the total immigrant numbers, as did Poland. Pakistan was slightly behind, at 6% of the total. Poland had been solidly in first place until around 2018. Roughly 100,000 Poles left the UK in 2018 and 2019.

What brings Expats to the UK?

The most common reason given for non-EU immigration was ‘family reasons’, at roughly 49%. Another 21% of non-EU immigrants said they came to work. Many of these people entered on family visas, and therefore are more likely to settle permanently in the UK compared to those on student visas or work visas.

Among EU-based immigrants, 48% said they came to work. Those numbers are even higher for immigrants from new EU member states – 62% of EU-2 immigrants came to work, and 59% of those from EU-8 countries.

Where do Immigrant Expats tend to live?

Unsurprisingly, London has a higher immigrant population than any other region in the UK. In 2019 35% of all immigrants to the UK lived in London and a further 13% lived elsewhere in the South East – accounting for just under half of all immigrants, more than 4.5 million. By comparison, only 10% of the UK’s native-born population lives in London.

On the other end of the spectrum, Northern Ireland, the North East and Wales each received only 1-2% of 2019’s immigrants to the UK.

Summary

Expats make up around 14% of the UK’s resident population. Expat mortgage brokers – those who specialise in serving clients who either currently work or have worked primarily in non-GBP currencies, or who hold primarily offshore assets – are seeing growing interest in Expat Buy to Let Mortgages and UK Expat Residential Mortgages generally.

This may be because at the moment the pound is weak relative to many major world currencies, but confidence in the UK’s COVID vaccination program and economic recovery are high, so that trend is expected to reverse. In short, money spent on UK properties now will be worth more in the Expat’s home country soon. Expat mortgage clients typically need specialist advice and guidance, as it can be tricky to find specialist lenders who are happy to accept payments in overseas currencies and with different work and immigration statuses etc.

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Rising numbers of expats and foreign buyers eye UK property market’s opportunities

Mortgage brokers, banks and property market professionals have reported rising interest from foreign buyers and expats looking to snap up homes here in the UK.

UK nationals living or working abroad and foreign investors from the US, Canada and East Asian countries are cashing on a weaker pound, a price slump in London’s new-build market and renewed confidence in the UK’s economy and vaccine programme.

Meanwhile political turbulence in China and the UK government’s new Visa scheme, open to holders of British National Overseas (BNO) passports in Hong Kong giving citizens the chance to relocate, has also driven up overseas interest in UK property.

Since the start of the year, bank’s say they have seen foreign income mortgage business rise.

Skipton International reported a trebling of mortgage completions from Hong Kong residents purchasing buy-to-let properties in the first quarter of 2021. Furthermore, between January to May the bank saw a 34 per cent increase in enquiries from residents in the EU compared to August to December 2020.

For Hong Kong buyers, both London and the South East of England were the most popular locations closely followed by the North West and Midlands.

Roger Hughes, Skipton International’s business development manager, said investors saw the UK as a “solid and stable jurisdiction”.

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Mortgage brokers have also reported more interest from overseas buyers.

Richard Campo said between March and April he saw a 137 per cent rise in enquiries about foreign income mortgages.

“We noticed a huge spike in enquiries from buyers living abroad wanting more information about getting a mortgage supported by foreign income, way above what we have seen elsewhere in the business,” he said.

“It’s logical as lockdown restrictions ease and pent up demand is released coupled with the vaccine roll-out going well. What’s interesting though is that they are not super-high-end buyers. We’re seeing a lot of expats and new buyers looking around the £500,000 mark.”

East Asian interest

New-build snagging and property management firm BuildScan said in May it saw an 18 per cent year-on-year rise in enquiries from East Asian buyers who had recently purchased new-build properties in London.

According to the firm’s analysis, the impact of a weaker pound and lower new-build property prices dampened by the pandemic offered opportunities for East Asian investors.

Between January 2020 and December, the health crisis caused new-build property prices in the Capital to fall by 3.4 per cent to £488,371.

But fluctuating exchange rates meant South Korean homebuyers would have benefitted from a 6.8 per cent fall in prices when compared to the average price at the start of the year. Chinese buyers saw a 6.2 per cent drop and Japanese buyers a decline of 5.6 per cent.

Homebuyers from Thailand, Malaysia and Hong Kong would have secured smaller discounts of between 0.9 per cent and 1.8 per cent.

Harry Yates, founder and managing director of BuildScan, said: “Despite the problems posed by the pandemic, we’ve continued to see a high degree of interest in the London market from East Asia.

“This has been driven, in part, by factors such as BNO visa availability for those relocating from Hong Kong, as well as the opportunity to cash in on a stamp duty saving.

“Fluctuating exchange rates have also boosted the affordability of London new-build homes which has also caused many savvy investors to act sooner rather than later. Although the pound has rallied of late, the London market remains an area of focus for many foreign buyers.”

Oxford estate agent Wallers has also reported a rise in enquiries in non-European overseas buyers over the past six to nine months, particularly from the Far East. He also noted a significant proportion of the enquiries were from families from Hong Kong who want to relocate to a different part of the world because of political troubles.

He added: “We have also seen more enquiries than normal from buyers in the USA and Canada, and there has been a sense that they are seeing the UK in more attractive terms now that it is out of the EU, which has been contrary to my own preconceived ideas about what Brexit might do to our property market.”

Safe bet

David Baker said his firm was being contacted by UK nationals who work or live overseas in the US and Dubai and they want to buy in the UK either for a family member or to rent it out. He is also seeing interest around the £500,000 price point. They have also had enquiries from British citizens working in Paris and Germany.

“We’re seeing lots of business from people not paid in sterling who want to buy in the UK,” said Baker. “I’m doing more of this type of business than ever before.

“The feeling is that the UK is a good place to have your money, and London is a safe bet.”

Baker said while there was a lot of interest in houses with gardens, he was seeing a gradual shift towards flats, which fell out of favour during the height of the pandemic.

He added: “Buyers are seeing the potential for deals to be had because they are not as popular as they once were. And those who are buying to rent out aren’t as concerned about garden space.”

By Samantha Partington

Source: Mortgage Solutions

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Chinese investment in UK assets estimated to be £135bn

Chinese investment in UK assets like businesses, infrastructure and property has reached an estimated £135bn – almost double what was previously thought.

About £44bn of this investment has come from state-owned firms, with many of the purchases happening over the past two years.

An investigation from the Sunday Times found that Chinese and Hong Kong investors own stakes in vital UK infrastructure providers like Thames Water and Heathrow Airport, along with £57bn worth of shares in blue chip FTSE100 firms.

The estimated £135bn value of Chinese ownership in the UK trumps the previous £71bn estimate by the Washington D.C.-based American Enterprise Institute.

Tory MP, and prominent China critic, told the Times: “This demonstrates that successive governments have been asleep on the watch. This evidence today shows how dangerously we are sailing towards Chinese control of key aspects of our business.

“China poses the single greatest strategic threat to the UK and the free world and we must make sure that we understand exactly how they set about essentially controlling key areas of economies, not only in the UK but also abroad.”

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The UK’s relationship with China has become increasingly frosty over the past year and a half, with foreign secretary Dominic Raab levelling sanctions on Beijing for its ethnic cleansing campaign against the country’s Uyghur Muslims and for its freedom of speech clampdown in Hong Kong.

Boris Johnson also moved to ban Chinese telecoms giant Huawei from helping build the UK’s 5G infrastructure based on fears that Beijing may use the network for espionage purposes – a charge Huawei denies.

However, the government’s integrated review of foreign and defence policy this year appeared to extend an olive branch to the Chinese government.

The review said the UK would “invest in enhanced China facing capabilities”, while adding that “open, trading economies like the UK will need to engage with China and remain open to Chinese trade and investment”.

Read more: UK sanctions Chinese officials over Uighur human rights abuses

China was also labelled as a “systemic challenge” in the review and not a threat to security, such a countries like Russia, Iran and North Korea.

Intelligence and Security committee chair, and Tory MP, Julian Lewis at the time criticised Johnson for displaying “the grasping naivety of the Cameron-Osborne years” when it came to China.

By Stefan Boscia

Source: City AM

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London should be the first to welcome those from Hong Kong

On 31st January, millions of Hong Kong residents were offered a new route to move to Britain. Already 5,000 have signed up for a visa that allows them to settle in the UK, with some estimating as many as two million may eventually move here. For London’s property market, which has had a tough few years between Brexit, stamp duty changes and covid-19, Hongkongers could provide a welcome shot in the arm.

They have already been making their mark. According to immigration advisers Astons, citizens of the Asian city-state invested over £300m in London housing in the first nine months of 2020. Meanwhile, recent research by Hamptons International revealed buyers from Hong Kong were behind almost ten percent of all sales last year in the capital’s wealthiest boroughs.

Many Hongkonger families had already bought investment properties in London before the Chinese government’s crackdown, while Hong Kong-headquartered firms such as C C Land and Far East Consortium have been major players in London real estate for years now.

C C Land acquired the Cheesegrater for £1.15bn in 2017 – the single largest purchase by a Chinese investment company in British property – and is one of the joint venture partners behind the £1bn revamp of the former Whiteleys department store.

The arrival of thousands of Hongkongers in the UK capital will likely drive further activity. Indeed, the chief executive of Far East Consortium told Bloomberg last year the developer hoped to capitalise on the potential exodus.

Given anxieties about immigration undeniably contributed to the Brexit vote, the government’s decision to open the doors to potentially millions of Hongkongers may seem surprising.

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But unlike in the Nineties, when there was firm opposition to giving Hongkongers a route to UK residency, there is now clear support across all party lines to give residents of this former British colony a chance to start a new life here.

This shouldn’t be too surprising. Attitudes have undeniably changed for the better over the past three decades. Hongkongers are also well educated, share our language and have a deep understanding of British institutions and traditions.

They will of course need some assistance settling in. Jobs and housing will be the key areas they need most help in according to community group Hong Kongers in Britain.

One obvious action the government could take would be to exempt Hongkongers from the incoming additional stamp duty on overseas buyers.

The levy should be abolished completely given international investors are a crucial source of development finance, especially in the major cities where homes are most needed. But at the very least Hongkongers should be excluded from paying.

The Greater London Authority and Mayor, working with London boroughs, should also be proactive in welcoming and supporting Hongkongers. This is all the more pressing given some 700,000 non-UK born workers left the capital during the pandemic. While many will no doubt return, London should be making sure it is the number one destination for those leaving the city-state.

Source: Property Wire

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International Demand For UK Property Expected to Surge This Summer

Industry experts are predicting that overseas buyers will be rushing to invest in UK property in summer 2021, once international restrictions are eased.

Summary:

  • International buyers have still got a strong appetite for investment properties in the UK. Buyers from the Middle East and Hong Kong are leading the pack.
  • UK property market remains buoyant despite the COVID-19 pandemic, demonstrating the resilience of this historically strong market.
  • Areas outside of London are being touted as the best investment and cities in the North and Midlands like Manchester, Birmingham and Leeds are attracting keen interest.

International travel restrictions look set to be eased this summer, with overseas buyers expected to be waiting eagerly to be able to scout out new UK property investment opportunities.

The British property market has emerged from the gloom of COVID-19 intact and as strong as ever. While demand slowed considerably at the start of the pandemic, pent-up demand was unleashed in the summer of 2020 and another surge is anticipated in summer 2021.

Every region in the UK recorded an increase in house prices in 2020 and estate agent Savills is predicting that house prices will rise by another 4% this year. Lucian Cook of Savills commented that: “By extending both the stamp duty holiday and the furlough scheme in last week’s Budget, the Chancellor has significantly reduced the downside risks in the mid-year, while a recovering economy should support price growth towards the year end.”

Buyers from overseas – especially the Middle East and Hong Kong – are particularly keen to capitalise on the strength of the market. While properties in London were previously highly sought-after, many of these buyers are now looking to seek better investments in regional cities.

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The Stamp Duty holiday gave many of these buyers a push in 2020, but global optimism is set to cause another surge in Middle Eastern and Hong Kong purchase rates in 2021 as well.

Investment property in the North West and Midlands is being highlighted as having much stronger rental yields and better opportunities for long-term capital appreciation.

Middle Eastern property buyers have long been leading the way in the race to get on the UK property ladder, but there has recently been an influx of buyers from Hong Kong as well. This is due to the new path to UK citizenship being granted to them in 2020.

Where are overseas investors looking?

Developers and estate agents across the North West and Midlands are reporting strong interest from overseas buyers, and this trend looks only set to increase in the summer.

Manchester, Leeds and Birmingham are all featuring as some of the most desirable locations for investment-savvy overseas property buyers.

Global real estate agent Jones Lang LaSalle forecast in January that Manchester will see the highest sales price growth (17.1%) and rental price growth (16.5%) in the UK over the next five years.

Manchester has been known as an investment hotspot for some years, but the city continues to grow – both in terms of industry and population – and is highly desirable by both young professionals and families alike.

The bustling city of Birmingham also continues to be a strong contender on the international property investment scene. In global real estate services company JLL’s recent residential housing report, Birmingham was reported to be the ‘standout performer’. House prices and the rental market are both expected to perform strongly over the next few years due to business and transport investment in the city.

Source: Select Property

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The number of overseas landlords reaches a five year high

The number of overseas landlords owning property in the UK has hit a five-year high of 184,000, marking an increase of 19% over five years.

Ludlowthompson says that the rise in the number of overseas landlords shows that Brexit has not been a deterrent for those looking to invest in UK property, as many overseas investors have capitalised on the drop in the value of pound sterling between the EU referendum and the Brexit deal to add to their portfolios.

Favourable exchange rates meant that foreign buyers were able to get more for their money, opening the market up to a wider pool of investors, says the estate agent.

Ludlowthompson adds that despite tax changes, property in the UK will remain an attractive long-term investment prospect for investors from many overseas jurisdictions.

Research shows that in recent years, there has been an increase in the number of Hong Kong buyers of UK property. This is expected to rise following the launch of the new visa for Hong Kong British National Overseas passport holders.

The reputation of schools and universities in the UK has also benefitted the property market. Ludlowthompson says that many overseas landlords who have purchased property have done so to provide accommodation for their children who were studying in the UK.

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Overseas landlords have been benefitting from the stamp duty holiday, which has enabled buyers to save as much as £15,000 on properties worth up to £500,000. The holiday is set to run until 30 June after which point stamp duty will be reintroduced on properties worth £250,000, and will apply to properties over the £125,000 threshold from 30 September. From 1 April, overseas landlords will be liable to pay a 2% stamp duty surcharge on property investments.

Stephen Ludlow, chairman at ludlowthompson, said: “Fears that Brexit might dampen the appeal of UK property amongst overseas investors have been unfounded, with the number of overseas landlords reaching a record high.

“Many canny investors took advantage of the temporary drop in Sterling’s value to purchase properties in the UK and benefited from both an increase in property prices and a recovery in sterling.

“Investments by overseas landlords into UK buy-to-let properties has ensured that there has been a steady stream of capital into that sector, which has kept the quality of rental stock far higher than would have been the case with these investors.”

Source: Property Wire

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Hong Kong Buyers Rush For Properties In The UK

There has been a significant increase in the number of people from Hong Kong buying property in the UK, estate agents report.

Research shows that Hong Kongers became the fifth largest foreign investors in central London as of last August and have been driving up prices in some popular districts outside the capital.

Some people are investing in the UK’s buy-to-let market, while others are making preparations to move to the UK to live.

A visa scheme to allow Hong Kong residents to come to the UK opened almost four weeks ago, with some 300,000 people expected to apply.

The visa, which is open to holders of a British National (Overseas) passport and their immediate dependents, will offer a fast track to UK citizenship.

The UK launched the new visa after China imposed a new security law.

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Those who apply and secure the visa will be able to apply for settlement after five years and then British citizenship after a further 12 months.

About 7,000 people from Hong Kong have already been allowed to settle in the UK since July, the Home Office said.

“It’s become much more of a trend in the past six months or so,” Guy Bradshaw, head of London Residential at Sotheby’s International Realty told Reuters. “I’ve certainly been involved in a lot more conversations and Zoom calls with people in Hong Kong and funds in Hong Kong.”

Marc von Grundherr, director at Benham and Reeves, said he has seen the same trend.

“I’ve had a few clients come to us and say, ‘Look, my son or my friend is wanting to invest in property because they’re thinking about coming [to the UK], but they can’t afford to do it on their own or they want to buy something slightly different – is it okay with two or three or four of them buying together?”

“That’s a change. Obviously, you always had larger investment companies who bought large amounts of stock, but we’re talking not the very, very, very wealthy,” von Grundherr said.

By MARC DA SILVA

Source: Property Industry Eye

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Hong Kong Residents Are Buying More Houses To Rent

Hong Kong residents are buying more houses and apartments to lease out for income in Britain, property agents say, a trend that coincides with what many expect to be a wave of emigration after China passed a national security law last year.

Hong Kongers became the fifth largest foreign investors in central London as of last August and have been driving up prices in some popular districts outside the UK capital.

But the new wave of buying also includes some Hong Kong residents who are pooling money to invest, a trend property agents expect to continue as more middle-class Hong Kong residents consider leaving for Britain and look to establish a source of revenue in advance.

“It’s become much more of a trend in the past six months or so,” Guy Bradshaw, head of London Residential at Sotheby’s International Realty told Reuters. “I’ve certainly been involved in a lot more conversations and Zoom calls with people in Hong Kong and funds in Hong Kong.”

The UK government is offering a new visa to Hong Kong holders of British National Overseas (BNO) passports that gives them a chance to become British citizens – a change it made after China’s national security law for Hong Kong.

A steady rental income would be useful in applying for the citizenship, as the BNO holders need to prove they can provide financial support for themselves for at least six months.

London estimates that over 300,000 Hong Kong residents could emigrate over the next five years, and Bank of America expects Hong Kong residents moving to Britain could trigger capital outflows of $36 billion in 2021.

While Hong Kong residents have long been active buyers of homes in Britain, real estate agents say more recently there has been increasing interest in older apartments and houses as rental assets.

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Hong Kongers have an affinity for real estate investment, with property prices in the Asian financial hub among the most expensive in the world.

Alan Wan, 38, who owns 13 residential properties in Britain, launched classes in Hong Kong two years ago – at the height of anti-government protests in Hong Kong – aimed at potential investors in properties in and around Manchester.

So far, his “UK Property Owner Association” class has attracted around 1,500 students. Enrolment spiked in the second half of last year after Beijing imposed the national security law.

One of Wan’s students, 30-year old Isla Kwok, who moved to Manchester in late January waiting to start a degree, is using the rental income she receives from a terraced house bought in 2019 to finance the cost of renting a smaller flat and mortgage payments.

She plans to re-mortgage her first property to buy a second one this year after getting a residence permit, as mortgage interest rates will be much lower.

“Once you’ve started your first property, it’s much easier to create more income to ease the financial pressure of living here,” Kwok said.

Wan said most of his students bought their properties individually, but he also had some who pooled money to buy in London.

Marc von Grundherr, director at realtor Benham and Reeves in London, said he has seen the same trend.

“I’ve had a few clients come to us and say, ‘Look, my son or my friend is wanting to invest in property because they’re thinking about coming (to Britain), but they can’t afford to do it on their own or they want to buy something slightly different – is it okay with two or three or four of them buying together?”

“That’s a change. Obviously you always had larger investment companies who bought large amounts of stock, but we’re talking not the very, very, very wealthy,” von Grundherr said.

Reporting by Clare Jim in Hong Kong and William James in London

Source: Reuters

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