Stanley Collins head of International markets at London Heights Residential describes a “high volume of Chinese money” in to the U.K property market. Stanley further adds “ post Brexit 12 months showing London Heights Residential enquiry levels raised by 67% from the South east Asia region; alongside the pound currency dropping this raised the level of sale conversation rates from the average market standard”. For those who can invest in U.K from Mainland China & Hong Kong, a fall of the sterling pound has made London and Manchester properties more attractive with an average net yield achievable of four five percent; is very acceptable compared to what investors may get elsewhere.
Demand from mainland China and Hong Kong has equalled investors interest for U.K Real estate property. Chinese and Honk Kong investors first moved heavily in to U.K assets in 2013, RCA figures show; In that year, they committed £3.2bn to London property and another £960m to regional real estate, more than quadruple the sums invested a year earlier. Since then they have invested at least £2bn a year into U.K real estate property, largely in London and Manchester.
Chinese and Honk Kong existing Investors in the UK have seen real estate profits increase heavily over the past five years; Bringing more interest from Chinese investors directly to London Property market; partly because the fall in the pound and partly because there are sign of an end to China’s own property bubble.
Sales of homes in the U.K capital’s most exclusive areas to Chinese buyers have risen since the Brexit vote, while investment into commercial property from China is on track to grow this year, even as other investors draw back. “The British currency is at a 30-year low; the Chinese housing market is at a 25-year high. Why look any further?”
The increase in the U.K commercial property market was even more pronounced: in the six months leading up to the Brexit vote, Chinese buyers poured estimated £1.5bn into London commercial property, a 75 per cent rise from a year earlier.
Despite the economic uncertainty of Brexit, Chinese investors see the British Currency and property markets as stable in the long term. South East Asia Investors have been thinking of going in to the U.K property market for some years. Brexit is just an opportunity; the investors have been waiting for, and now they are purchasing heavily while the currency is low.
London makes up more than half the properties snapped up by Chinese buyers, who also look to Manchester, Birmingham, Cambridge and Oxford.
Chinese buyers are especially keen on flats in northern cities, many of which have high guaranteed rental yields, because of Government ambitions to create a so-called Northern Powerhouse, and are helping build it too. Beijing Engineering Construction Group is investing £800m in Manchester’s Airport City development.
Part of the reason Chinese buyers invest in the UK is for the educational institutions, for which parents buy apartments for their children. This has boosted the Student accommodation market largely over the past 10 years. A lot of that wealth is coming from China, which has been one of the biggest buyers of UK property in the last year, buoyed by the weaker pound in the wake of the uncertainty caused by Brexit.
According to Juwai.com, which calls itself China’s leading international property portal, growth in the enquiries into UK property in the last 12 months has jumped 60%, and Chinese buyers are increasingly interested to the UK.
By some estimates, two thirds of the global middle class by 2030 will be living in Asia. They’ve been the driving force behind investor appetite in global real estate markets, including the UK’s.
As Asia’s middle classes get richer and more aspirational, that appetite is only likely to grow.