Hong Kong and Chinese investors continue to view the British property market as one of the most lucrative options for investment. 

Britain’s strong economy, top business climate and competitive tax and legal systems, make the UK’s property market an attractive investment option from buyers from all over the world. 

Over recent months, the UK property market has witnessed in increase in demand from Hong Kong and Chinese buyers. London is still home to the highest levels of investment, followed closely by other major cities across Britain, including Manchester, Birmingham and Liverpool which are quickly becoming a top choice. 

Although the coronavirus has halted much of the activity in the British property market, the outbreak peaked much earlier in China, meaning that investors were prepared to push ahead with their investment plans even through the grueling lockdown months. 

Head of new developments at Harrods Estates Simon Barry says: “Asian investors have continued to be active in terms of enquiries, offers and interest”. For the firm, these buyers make up the single largest group of investors over the past three months.

“Anecdotally, Asian clients have told us that their cultures are more adapted to outbreaks of flu-related diseases and familiar with the precautions needed to halt their spread,” Barry says.

“We were surprised when Asian clients were warning us at the beginning of March of the severity of Covid-19. But equally they seem to be more optimistic about the ability of our economies to recover.”

Furthermore, the ongoing turmoil in Hong Kong’s political climate, which emerged last summer and has resulted in relentless protests, means that the UK was seen widely as a safer market for investment, despite Brexit. 

Caspar Harvard-Walls, partner at Black Brick, believes the protests have had a positive impact on the market in Britain over the past year. 

“As the political situation in Hong Kong worsened towards the end of 2019, we saw a significant amount of new clients from that region looking to purchase property in the UK, to ensure that they had a plan if the instability continued,” Harvard-Walls states.

“Whilst Covid-19 has naturally taken pre-eminence in everyone’s minds over the last few months, it does not mean that the situation in Hong Kong is any better than it was six months ago.”

Another reason why Hong Kong and Chinese investors continue to turn to the UK property market for lucrative investment is the favourable currency exchange rates. The pound continues to perform at a historic low against the U.S. dollar, drawing in investors. The Hong Kong dollar on the other hand, performs quite strongly, meaning that the UK offers better value for money. 

UK interest rates are also extremely low, meaning that for those who are looking to invest using a UK mortgage, rates are growing increasingly competitive. Tax changes also offer significant benefits. At the end of 2019, the British government announced a 2% stamp duty surcharge for foreign buyers, to be placed into effect as of 2021. This means that investors are becoming more competitive amongst each other when it comes to securing property deals. 

Lastly, for investors in search for diversification, the UK offers other cities beyond its capital’s borders which offer attractive investment opportunities. An increasing number of Hong Kong and Chinese buyers are now looking at the north and Midlands regions in Britain, which boast property markets that are outperforming London. 

Domenica Di Lieto, chief executive of Chinese marketing consultancy Emerging Communications, says: “Buying criteria is most frequently met in northern cities, particularly Manchester and Liverpool, which after London are the second and third most popular cities for Chinese buyers.”

“Though this profile of buyer may reside at the lower end of the market, they often own several properties, and are frequently opportunists that will extend portfolios at short notice if they see the right opportunity.”