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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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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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London’s housing market lures Hong Kongers seeking safe haven

Wealthy Hong Kong residents seeking to escape the city’s political upheaval are flocking to London, offering a potential lift to the capital’s ailing luxury housing market.

Realtors are seeing a surge in interest from Hong Kong, driven by falling prices, favorable exchange rates and Prime Minister Boris Johnson’s easing of immigration rules for many residents of the former British colony. The number of Hong Kong clients registering with upmarket real estate agency Chestertons is up nearly 80 per cent this year compared with 2019, while inquiries at Black Brick Property Solutions and Beauchamp Estates are up by about a fifth.

An influx of Hong Kong buyers would give a boost to London’s prime residential market, where prices have fallen by more than 20 per cent since 2014, according to broker Knight Frank. Investors from the Asian financial hub accounted for nearly 10 per cent of London luxury home purchases in 2010, but that share declined steadily in the following years before starting to pick up in 2019.

The increased interest came as mass protests rocked Hong Kong, accelerating after a political crackdown by China, which imposed a new national security law at the end of June. In response, the U.K. said it would allow almost three million holders of so-called British National (Overseas) passports to move to Britain. That’s helped make the U.K. the biggest draw at property exhibitions in Hong Kong, according to property app Soho.

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“Unlike wealthy buyers from the Middle East or the U.S, Hong Kongers are probably looking to relocate permanently to the U.K.,” Camilla Dell, managing partner at Black Brick, said in an interview. “There will be potential for more buyers as a result of BNO holders being told they’re welcome with open arms.”

Hong Kong buyers are drawn to London by its comparatively cheap prices. The average value of prime London homes was $1,830 per square foot in June, compared with $4,440 in Hong Kong, according to Savills Plc. They also benefit from the exchange rate. Since the peak of the market in 2014, buyers with Hong Kong dollars have reaped a relative discount of 40 per cent, twice the price decline in pound terms, Liam Bailey, Knight Frank’s global head of research, said in an emailed reply to questions.

While London’s luxury market is struggling, the country’s housing market as a whole is on the up, stoked by government support programs that are part of its efforts to restart the economy.

The spike in Hong Kong buyers’ interest is also a response to changes in the U.K.’s sales tax on property purchases. A temporary tax break will expire in March, while a new higher rate on overseas buyers kicks in the following month.

“Buyers from Hong Kong are driving the luxury residential market in London at the moment,” said Kathrin Hersel, property director at Almacantar, a developer and investor whose inquiries from Hong Kong have more than doubled since mid-March from the year-earlier period. And in recent months, they’ve started to take a longer-term view of the market.

“A year ago we were probably taking more inquiries for rental investments,” Hersel said. “Now these buyers want second homes.” – Bloomberg

Source: NST

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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