Creating a legacy

As real estate in the UK begins its recovery after subsequent lockdowns, there is more positivity around and confidence is returning to the market. Since the beginning of March, shortly after the UK Government announced a detailed roadmap for getting back to normal, our Hong Kong office saw a surge of interest, with London property investment the primary focus. When I joined Benham and Reeves Hong Kong office earlier in 2021, following the positive roll-out of vaccines in the UK, investors could see a clear way forward. And at the beginning of March, we started to see a real uptake in property sales which was a clear demonstration of the confidence that international buyers have in the wider UK economy. London property, in particular, remains at the top of the list (as ever), and we’ve also seen a surge of enquiries because of the BNO Visa scheme which provides a route to British Citizenship. Understanding what motivates Hong Kong investors is key I started my career in international residential property back in 2008 when the world was facing the global financial crisis. At that time, I had the advantage of working under the mentorship of a few London property experts whose vast experience and connections were combined with the right property propositions, made available to Asian investors, and I gained a lot of knowledge of what makes a good investment. My policy has always been to provide a customised, one-stop service to investors, from providing research and background advice on property purchase, through to leasing and management services and resale when the right opportunity arises. I have a strong base of clients who are recurring investors in the London market as they have experienced good capital appreciation and rental returns which London historically offers. I believe my experience is especially beneficial for new buyers, those looking for an overseas investment, investing in the UK market for the first time. With my property expertise, I have always ‘walked the talk’ and was a pioneer investor in the North- London regeneration project at Woodberry Down where I have seen capital values increased a staggering 96% since first launch in 2012, so I think I bought very well. Looking back, if I had that time again, I would also have bought a 1 or 2 bedroom apartment in Berkeley London’s Dickens Yard development in Ealing which was also recommended to me back in 2012 – the year when London hosted the Olympics - but Ealing was not top of my radar at that time. The area has also seen huge growth, almost doubling its value too and provides a good rental income with its continued success. Now there is Filmworks and other schemes coming to the area and the location has been totally transformed.

Why Hong Kongers favour London as an investment Currently, there are two groups of Hong Kong buyers; those who buy mainly for investment, these are seasoned investors who know London well: London has proved that it is an extremely resilient City, an international hub for business with a prosperous jobs market and these are rudiments that underpin confidence. And there are individuals who are buying for own use as they consider migration options to the UK on the BNO Visa. There has always been an affinity in investing in London due to the long colonial history but especially so with the new BNO system which allows BNO holders and their immediate family members to live and work for an extended period of time, and the possibility of applying for the British citizenship. Zone 1 prime central London verses outer prime While Zone 1 central London due to its established market, continues to be an aspirational asset for many investors and largely preferred by established investors hunting for good deals, we are seeing more and more Hong Kong investors looking for increased value further afield. They are eyeing regeneration areas in the outer Zones 3-4 which offers good value and solid returns of beyond 4%. Families looking to relocate to London are also on the increase with high importance on a friendly neighbourhood with quality amenities and schools for their children. Family friendly areas outside of Zone 1 such as Barnet, Harrow and Greenwich are top choices for current investments. The Brexit effect on the buying habits of Hong Kong investors Now we have the conclusion of Brexit, Hong Kong investors are even stronger in their commitment to the London property market. The UK Government’s extension of the Stamp Duty tax has also provided more certainty and confidence towards the resilience of the London market. On top of this, the recent BNO visa policy has also given more Hong Kong BNO holders a reason to purchase homes in the UK. Looking to the future Here at Benham and Reeves, we act as a bespoke consultancy to Hong Kong investors. We work directly with select UK developers offering hand-picked projects that offer high quality and solid returns for all our buyers. Due to our long years of establishment, we have a good landlord base with access to of some of the best gems of the London secondary property market. 2020 saw us celebrate 25 years’ operating in Hong Kong and our ‘edge’ is not just providing buying and selling services to Hong Kong buyers, but also support on the rental, furnishing and tax filing services which our clients have come to greatly value. I think the pandemic has really refocused property investors and they are now reviewing their portfolios to ensure they have diversified sources of income. The UK continues to present attractive returns and increased growth potential. If anyone reading this would like to get in touch, our Hong Kong team can introduce a number of opportunities for new and second-hand properties.