China’s worsening relations with the US, Australia and Canada are driving wealthy Hongkongers and Chinese to buy luxury homes in London instead of investing their money in places such as Malibu, Los Angeles, and Toronto, making them the largest group of foreign buyers in the British capital over the last 12 months, according to Beauchamp Estates.
The buying spree has helped Hongkongers and mainland Chinese overtake Russians and Indians to become the top international buyers in the UK for the first time, the London-based boutique property agency said.
Other agents and developers have seen a similar trend. And a potential change in UK immigration policy that could pave the way to eventual citizenship for Hongkongers who hold a British National (Overseas) passport is likely to result in higher demand for homes in London.
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Since the general election in the UK in December, Beauchamp Estates have sold over £300 million (US$370 million) worth of luxury London residential property to Hong Kong buyers in locations including Knightsbridge, Belgravia and Islington.
Between January and June, Hong Kong and mainland Chinese buyers accounted for a fifth of international sales in London for properties worth more than £10 million.
Including commercial real estate, buyers from Hong Kong and China invested £7.69 billion in London property in 2019, over £750 million of it in houses in Westminster City, and the Kensington and Chelsea districts.
“Over the last 12 months, mainland and Hong Kong investors have become the leading overseas buyer group purchasing luxury London property and their dominance in the market has grown despite the Covid-19 pandemic,” said Gary Hersham, founding director at Beauchamp Estates.
In recent weeks, property agency Aston Chase saw inquiries from Hongkongers rise by half, while developer Avanton said that since the last week of March, Hongkongers had made up the majority of the foreign buyers for its Coda property in Battersea.
The increasing demand from Hongkongers and mainland Chinese for London property comes at a time marked by major disruption in Hong Kong, beginning in June last year when social unrest erupted in the city. Then at the start of this year, the city was placed in virtual lockdown to contain the spread of the deadly coronavirus, which was first detected in the mainland city of Wuhan.
In recent weeks, Beijing has found itself engaging in a war of words and tit-for-tat visa restrictions with the US over its national security law in Hong Kong that is widely perceived as an erosion of the city’s freedoms.
Its row with Australia, meanwhile, began with Canberra’s support for an independent probe into the origin of the coronavirus. China has since warned its citizens about racism in Australia, and slapped tariffs on Australian beef and barley.
Ottawa and Beijing’s relations took a nosedive when Canadian authorities arrested Meng Wangzhou, Huawei’s deputy chairman, on allegations of breaching Washington’s sanctions on Iran, and then approved her extradition to the US.
The frayed relations with these countries have made “Chinese and Hong Kong clients focus more on London as a destination for investing in property both for end use and also investment,” said Jeremy Gee, managing director of Beauchamp Estates.
“In the age of Brexit the UK government has made no secret of the fact that it wishes to deepen and strengthen relations and cross-investments with China as it seeks new markets. All these reasons are helping to drive greater investment into London real estate from both Hong Kong and mainland China,” he said.
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