Hong Kong turns its eyes on London property

Growing numbers of Hong Kong residents have been seeking to buy property in London in recent weeks, according to several reports in the past week.

David Sapsted

30 July 2020

The imposition by Beijing of new security laws on the former colony and the UK's subsequent offer of settlement for 2.9 million residents who qualify for a British National Overseas passport, have led to a surge in inquiries.In a report on Thursday, Chestertons, one of the capital’s largest estate agents, said that between June 1 and July 7, the number of Hongkongers registering as buyers more than doubled compared to the same period last year.

Which neighbourhoods are potential property buyers from Hong Kong looking at?

The report also showed that the would-be buyers were interested in areas not previously targeted. "In the past, Hong Kong buyers have generally bought investment properties outside of central London where yields are higher, in areas like such as Canary Wharf," said Chestertons."However, recent interest has been more focused on buying family properties to live in south west London and central London, where inquiries from Hong Kong have risen by 53% compared to last year."Chestertons said that, over the past month, Putney - an area that previously had been of virtually no interest to Hong Kong buyers - had registered "numerous" new buyers.Elsewhere in west London, the firm said three-quarters of the apartments released in the first phase of a new development had been reserved by Hong Kong buyers within a matter of weeks, although these were mainly for investment.Guy Gittins, Chestertons' managing director, said, “Given the close historic ties between Hong Kong and the UK, London has always been popular with Hong Kongers as a place to visit, invest and educate their children."However, the current situation and uncertainty in Hong Kong has caused many to look at London property as a ‘safe haven’ investment, while the stamp duty holiday and the weak pound are added attractions."Similarly, two of London's leading luxury estate agents - Glentree International and Beauchamp Estates - told Business Insider this week that they had seen a marked increase in inquiries from Hong Kong buyers since the Hong Kong legislature rubber-stamped the national security law a month ago."Since the recent political issues and new laws being imposed by mainland China, we have seen a 20% upturn in inquiries from Hong Kong buyers," Jeremy Gee, managing director of Beauchamp Estates, told Business Insider."This is likely to become a steady stream of ongoing inquiries now that the UK government has confirmed that three million Hong Kongers can have residency rights in the UK."

Hong Kong citizens seeking luxury properties in London

Trevor Abrahmsohn, the founder of Glentree, said that his firm was currently in discussion with a number of Hongkongers who had contacted the company since the passing of the new law.Mr Abrahmsohn said the most expensive home under consideration was priced at £50 million, with another Hong Kong resident interested in renting a property for about £40,000 a week.Arlington Residential, another luxury agent, saw a 40% increase in inquiries from Hong Kong buyers last month, notably for homes in Highgate and St. John's Wood, according to a report in The Times.

London commercial property: a good opportunity for Hong Kong investors

Meanwhile, the London commercial property market is also attracting further interest from Hong Kong, according to the South China Morning Post."Property investors are now reviewing their portfolios to ensure diversified sources of income by sector and by geography," the newspaper reported this week."London’s commercial assets present a good opportunity for Hong Kong investors and developers to diversify their investment income with attractive returns and lots of potential upside to boot."Their love for London’s commercial assets has not waned as a result of Covid-19. The recent purchase of 25 Cabot Square - home to Morgan Stanley’s business - by Link Reit for £380 million are just an example underscoring the trend. Hong Kong funds remain a strong engine fuelling investment activities in the UK capital."