international demand for british real estate | xchange

London’s Properties: A Citizenship Route For Hong Kong Investors?

London’s housing market, most notably its prime and upscale estates has always been a target for wealthy investors from the east. Over the years, we’ve seen interest specifically from Hong Kong and mainland china. We’ve also begun to see a surge of Chinese demand as real estate agents have been reporting higher than average levels of investment in the past month. 

Buyers from HK and Mainland China now represent the largest group of international investors in the prime upscale London residential real estate market, according to a report from Beauchamp Estates.

Why the surge?

The sharp increase in buyers last month came from a statement made by Boris Johnson where he addressed Hong Kong residents talking about a “route to citizenship” in the UK

Additionally, the weakening of the Sterling, the falling property prices, the recent Stamp Duty holiday, the government’s pledge to impose an extra tax on foreign buyers from April 1, 2021, and the promise of a possible citizenship have all come in together to increase interest from such foreign buyers. There’s no doubt that wealthy eastern investors want to take action in the current timeframe.

Why international investment?

Now more than ever it’s become clear that a window of opportunity has opened for agencies all over the UK. Appealing to the international clientele is the name of the game. So what is it that they want? 

Usually, wealthy foreign Hong Kong investors come to London to invest in property where their own country cannot provide alternative investment. 

This could be due to :

  • Not enough ROI
  • Property market not liquid enough
  • Authoritarian regime 
  • Other advantages (e.g. possible citizenship)

For example cash rich Hong Kong investors would rather invest their capital in a city like London rather than taking on risk that comes with investing in unstable markets. 

London’s prime real estate market has proven itself to be a relatively stable investment with lots of historical precedent to back it up.

The types of buyers?

The interest from the east is multifold. There isn’t simply one buyer to profile look out for. Let’s start with the smaller buyers. 

These international buyers look for properties from the £500,000 to £2 million mark, new build to rent properties that produce a 3-5% annual ROI, located around the city, Canary Wharf and Islington. 

Then there are Chinese families interested in upscale properties ranging from 5 to 10 million in neighbourhoods with good schools like Marylebone and Regent’s Park.

Another type of buyer is the elite of the east, looking to spend north of 15 million on luxury properties, like mansions in Belgravia and Knightsbridge and of course the occasional 200 million penthouse. 

Finally there exists corporate buyers and other eastern property developers, investing in Canary Wharf and the city. 

How to perfectly utilise this opportunity?

In an age with an exponentially evolving society, a firm that shows it’s willingness to grow with and respond to the ever-changing needs of its clients is a firm that will succeed far beyond its line of duty. As the world becomes more interconnected, opportunities start arising. The real estate industry is notoriously local in its operations. 

However, our existing ties and offices based in Singapore and China mean that we have our feet on the ground so that you don’t have to be there. Think of XChange as an extension to your team’s assets, allowing you to go global without having to open up a branch there. 

We built XChange with a premise that investors in Hong Kong and Asia should also be able to participate in exciting high yield property opportunities in a safe environment, all while benefiting the local UK economy. 

“We are seeing lots of demand from investors who are looking to safeguard their money into a reliable London property market. The main problem they commonly face is one of trust and finding good deals. We believe independent international investors tend to not get the best deals since they don’t have an established presence and hands on knowledge of London’s market. 

XChange’s success is in part owed to our solid network in the UK and our track record working with developers and delivering high yield propositions to even the largest rental operators in the world. We are now extending such propositions to buy-to-let investors who are eager to participate in the exciting rental revolution in the UK.” 

 – Megan Wang, Asia lead, Houzen

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