The UK property market has already seen an influx of interest from Hong Kong buyers since the new path to citizenship was announced over the summer. And this will likely pick up even more.
In recent years, UK property has benefited from strong interest from Hong Kong buyers and investors. A resurgence in COVID-19 cases and the second national lockdown led to a downfall in those looking to buy property in the UK.
A recent article by South China Morning Post states this is only a short lull before the “January visa floodgate”. In the article, Kevin Bowers, a Hong Kong-based lawyer at Bowers Law, comments: “At the moment, it’s a trickle because of Covid-19. I expect the flood to start again and anticipate thousands of applications for us.”
New path to citizenship will lead to an influx of demand
During the first nine months of 2020, Hong Kong buyers were the second busiest foreign buyers of property in the UK, according to research by Astons. Hong Kong buyers purchased £305.6m of prime London homes and 6,438 homes amounting to £8.1bn across the UK.
Even though interest has dropped in the short term, demand from Hong Kong buyers will soar in the lead up to the new visa opening for applications on the 31st of January.
The visa will be open to British National Overseas (BNO) passport holders in Hong Kong and their immediate family members. This visa provides a new path to citizenship, and interest in UK property is likely to soar from buyers seeking citizenship.
Camilla Dell, managing partner at Black Brick, says in an interview with Bloomberg: “Unlike wealthy buyers from the Middle East or the U.S, Hong Kongers are probably looking to relocate permanently to the U.K. There will be potential for more buyers as a result of BNO holders being told they’re welcome with open arms.”
Where are Hong Kong buyers purchasing property?
London is still attracting the highest level of investment from Hong Kong buyers and investors. However, other major cities are following closely behind, including Manchester and Liverpool. Property in these regional cities offer more value and potentially lucrative returns in the long-term through capital appreciation.
Liverpool and Manchester are home to strong economies, a range of employment opportunities and top-notch universities. Numerous investment and regeneration projects are in the pipeline for the two cities. This has made both places especially appealing to live and invest in.
Interest in London and thriving cities in the north of England will likely increase further from Hong Kong buyers as the opening date for the new visa applications nears.
The benefits of investing in UK property
Purchasing property in the UK comes with numerous benefits. The UK provides comparatively cheaper properties prices. Additionally, current favourable currency exchange rates allows buyers and investors from Hong Kong to get more for their money. Mortgage interest rates are also relatively low.
Investing in property in the UK has been considered an international safe haven, especially for Hong Kong buyers and investors. Hong Kong has faced a high level of political stress since the summer of the 2019. The UK is a safe market to invest in despite the political and economic uncertainty surrounding Brexit.
Even during uncertain times, the UK property market has shown strength and resilience. And this could lead to more Hong Kong buyers and investors purchasing property in the UK.