The number of Hong Kong buyers coming into the UK to invest in property has been climbing, and there are plenty of finance options available for those seeking a UK mortgage.
The latest research into overseas investors in the UK property market shows a healthy appetite for the country’s housing stock, particularly in prime central London, with certain nationalities in particular honing in on the opportunities on offer.
One such country where an notable increase was recorded was from Hong Kong buyers. The report from Hamptons shows notes that Hong Kong buyers have increased their share in overseas-owned property from 2% in 2021 to 4% in 2022.
This can be attributed to a few factors, one of which is the introduction of the British National Overseas (BNO) Visa programme. This has opened up the option to many more Hong Kongers to purchase property to live in the UK, or often for relatives to live in while they work or study in the country.
The currency exchange is another contributing factor. With the Hong Kong dollar closely linked to the US dollar, against which the British pound has been performing weakly, it remains an opportune time for Hong Kong buyers to invest in UK property and essentially make large savings.
What’s more, the UK property market has continued to show its resilience against external factors over recent years, from Brexit to Covid to inflation, as well as historical financial turbulence, making it an appealing prospect for those seeking long-term returns.
Can Hong Kong buyers get a UK mortgage?
It is perfectly possible to get a UK mortgage as a Hong Kong citizen, whether you hold a UK passport, a BNO passport or a Hong Kong resident’s identity card. The UK has numerous lenders, both mainstream and specialist, that will be able to cater to your needs.
HSBC, Barclays and Natwest are some of the best known high street banks that offer mortgages to Hong Kong buyers. Alongside this, smaller, more specialist lenders could offer competitive products, too, which is why many buyers from overseas use an independent mortgage broker to find the best deal.
Mortgage type and amount
What type of mortgage you require will also play a part. In the UK, there are separate mortgages based on whether you live in the property (a homeowner’s mortgage) or whether you intend to let the property out (a buy-to-let mortgage).
It is important to be honest with your lender about how you intend to use the property, to ensure you are given the correct mortgage product. If you let the property out without declaring this to your provider, you will be in breach of the terms.
The amount you can borrow will also vary widely, depending on the type of property you’re buying, your deposit amount, your annual income and its stability, your residence status and your credit history. Again, a broker should be able to help you work this out, or you can go directly to a lender.
What are the requirements?
Alongside what has already been mentioned, you will generally need to put down a 25% deposit on the value of the property, in order to get the remaining amount as a mortgage. The higher your deposit, the better interest rate you are likely to secure, making monthly repayments cheaper.
If there are additional risk factors, such as your employment status or income, the lender may ask that you put down a higher deposit, but this will vary from individual to individual.
You will also need to open a UK bank account before you can apply for your mortgage. You will need this, plus documentation such as proof of identity, proof of deposit funds and proof of income, as well as your visa paperwork, before you can apply.
Buy-to-let
Many Hong Kong buyers are taking advantage of the UK’s strong rental market by investing in buy-to-let properties in the country, and many will do so using a buy-to-let mortgage.
Again, there will be additional requirements to take into account such as being able to prove that the rental income will cover the mortgage payments, to ensure the investment is viable. You will probably need to prove your own income is also enough to cover the payments in the event of tenants not paying.
Due to the higher level of risk involved with Hong Kong buyers investing in buy-to-let properties in the UK, the checks for identity, anti-money laundering and funding sources might be more stringent.
At BuyAssociation, we have a dedicated Hong Kong office as well as experts based in the UK who can help you find your next UK property investment opportunity. Get in touch to find out more.
