According to a news source, just in the course of 2020 the number of Hong Kong citizens considering to move out of the country and get settled in the UK has surged by about 50 percent more than the number of total emigration inquiries.
The spike is observed over the past 18 months due to the uncertain political future of Hong Kong, which led to the emigration from the region. Though the UK is not the only consideration but there is an increase in queries about immigration rules and regulations of Australia, Canada and the USA – which have softened the visa requirements for Hong Kongers, since the new security law was implemented.
However, UK has topped the popularity chart because of London’s offer of bureaucracy-free relocations for almost three million British National (Overseas) – BNO passport holders and their families. Resultantly, a sudden increase in demand for residential properties is observed as a large number of affluent individuals have registered their interest in London as their favourite international destination to live and work for the rest of their lives.
“Several global destinations are equally appealing with an optimistic outlook and positive return on investment but the proven track record of stability and growth is what makes London real estate market more viable, enticing and promising for potential investors,” says Sajid Bashir, the CEO at Copperstones Properties, London.
Why are Hong Kongers migrating?
There was unrest in Hong Kong due to large-scale protests that broke out in the spring of 2019 against plans to allow extradition to mainland China. Despite the fact that extradition bill was withdrawn, pro-democracy protests continued throughout the following year, until China imposed a national security law on Hong Kong to assert its control over the region, in June 2020.
After which, Britain accused China of violating its promise to grant Hong Kong semi-autonomous powers until 2047 but China shrugged it off. In response, the UK government announced a new visa system allowing millions of Hong Kong citizens to live and work in the UK.
Under this programme, Britain government offered refuge to almost 3 million Hong Kong residents eligible for BNO passport. This new category allows people with British National (Overseas) status to live, work and study in Britain for five years and after a year more, they can apply for British citizenship. Initially, the BNO passport allowed Hong Kongers six-month visit UK without the right to work.
How does it affect London real estate market?
As we have previously discussed, a surge in the interest in London real estate has been observed from Hong Kong people over the last year. Not just the UK real estate agents but Astons, an investment immigration firm, confirms their interest. According to their data, Hong Kong residents have become the second-largest foreign buyers’ group that has invested in properties in London throughout 2020.
They accounted for 9.2% of foreign property purchases and spent an estimated £305.5 million across 243 transactions, or roughly £1.19 million per property. And according to Copperstones data, the real estate agency has received a large number of investment queries by the high-net-worth foreign buyers amidst global pandemic, since the 3rd quarter of 2020. Hong Kongers make a significant chunk in the foreign buyers’ pool showing utmost interest in properties in London and the interest has only accelerated since then.
London is emerging as a clear favourite destination, as Hong Kong residents are showing interest in investing in residential properties in London in order to permanently shift there. Some affluent entrepreneurs have plans to shift their business and families together, have shown interest in commercial properties of the capital, too.
Types of Hong Kong investors
There is a significant surge in the number of property investors that belong to Hong Kong since the new visa scheme was announced but according to statistics, the people pursuing the immigration route tend not to be the richest ones. On the contrary, high-net-worth individuals had started relocation plans, well before BNO visa scheme was even announced. They have already explored multiple landing options before opting London as a destination choice.
According to data released by Astons, Hong Kong investors topped the list of countries with the most successful applications for a highly sought-after investor visa in the fourth quarter of 2020. Ten Hong Kong people received the Tier 1 Investor visa, which requires £1 million in liquid assets, among other requirements.
Few economists are of the view that adopting BNO route might indicate the mind set of Hong Kong residents, who just want to pack bags and never go back. A majority of entrepreneurs are not ready to take this route and leave Hong Kong permanently. They are just considering the international option due to the on-going political changes in Hong Kong. Investment immigration scheme is what suits them the most as now, they can spend significant time in London or their families can stay in the dream capital.
They can apply for permanent residency after spending five years in London on the Tier 1 visa, without losing their residence in Hong Kong. They can spend some time in Hong Kong too, but the visas allow them to diversify assets geographically.
What types of properties Hong Kong investors look for?
High-net-worth individuals look for premium properties in London located in Zone 1 and around Buckingham Palace, because they do not want to be left out and always want to be in the centre of things. Currently, the sales team is in contact with a few wealthiest individuals from Hong Kong looking for mansions, luxury apartments and penthouses in central London.
Another interesting fact is that most of the Hong Kong buyers (who are looking for premium properties in London) are cash buyers. And these are the properties that they will use for themselves and hardly considered as buy-to-let deals.
Buying properties for personal use
Even the rest of individuals who adopted another immigration route seem to be interested in properties located at the outskirts of London such as residential projects by Barratt Homes. Many investors are bringing their life-long savings and looking for multiple investment properties, besides having a home in London for their personal use. The investment properties are for their children, which can currently help them generate a regular source of income, in terms of rental amounts.
People from Hong Kong generally seem to be inclined towards homes with lawns, homes with views or homes in the suburbs with open green spaces around. Most of the projects by Barratt Homes fulfil this definition and can become a perfect investment choice for Hong Kongers looking for primary homes in the green, leafy suburbs.
There are individuals with the mind set to adopt the immigration route and experience the change first, thus they are more interested in rental properties in and around London. They may have plans to spend first few years in rental properties and after understanding the life there, buy their own homes according to personal preferences.
According to our data and the number of queries received at Copperstones, it can be safely said that Hong Kongers coming through BNO route are looking for their own homes, as they are planning to stay in London permanently. If you are also looking for rental property, or planning to buy your own home, get in touch with us and we have an assorted collection for our esteemed clients. Call us on +44 203 888 5555 to learn more. Looking forward to hearing from you.