Covid-19 lockdown tempers interest in UK property from Hongkongers in lull before January visa floodgate

Ethan Paul
·4-min read

A resurgence in Covid-19 cases in the UK in recent months has stemmed the flow of Hongkongers looking to buy property and relocate there. This may just be a lull before a special visa process kicks off in January for British National (Overseas) passport holders.

The British government imposed a second national lockdown in early November after a sharp uptick in Covid-19 infections. It will transition to more flexible restrictions starting December 2 at a time when it’s liberalising immigration policy for Hongkongers in reaction to China imposing a national security law on Hong Kong in June.

The government will accept applications from January 31 from BN (O) passport holders and their immediate family members for a special class of visa that puts them on the path to UK citizenship. Hongkongers were the second busiest foreign buyers of UK property from January to September this year, according to Astons.

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“At the moment, it’s a trickle because of Covid-19,” said Kevin Bowers, a Hong Kong-based lawyer at Bowers Law. “I expect the flood to start again and anticipate thousands of applications for us” which may inundate the immigration services by then, he added.

Bowers is organising a consortium of companies to deliver “the whole package” to those considering uprooting themselves from the city, including education, property, cultural assimilation, and even pet relocation services.

Hongkongers bought £305.6 million (US$405 million) of prime London houses in the first nine months of the year, making them the busiest foreign investors after the French, investment immigration adviser Astons said last month.

One of the beneficiaries is Battersea Power Station, a staple of central London that is undergoing a £9 billion redevelopment with thousands of new flats. The project has seen a 150 per cent jump in enquiries from Hong Kong, helping the developer more than double its year-on-year sales since March.

Battersea Power Station in London, which will be home to Apple’s new UK campus from 2021. Photo: Battersea Power Station Development Company
Battersea Power Station in London, which will be home to Apple’s new UK campus from 2021. Photo: Battersea Power Station Development Company

“Part of that is no doubt driven by the BN (O),” said Philip Mason, Battersea Power Station’s International Director. “But London has always been considered a safe haven for people to invest, and the low value of the pound also certainly helps as well.”

The British pound has gained only 0.8 per cent against the US dollar this year, making UK assets relatively stable for Hong Kong investors, while other major currencies has appreciated by 4 to 10 per cent.

The new visa policy for BN (O) passport holders is the UK response to Beijing’s security law for Hong Kong in late June, which the Boris Johnson government said has eroded the freedoms under the “one country, two systems” framework agreed before the city’s handover to China’s sovereignty in 1997.

Hong Kong’s uncertain political future, paired with a confluence of economic factors including the UK’s extension of a holiday on property stamp duties, has sparked demand for UK assets.

AWS Prime, a London-based firm that connects wealthy clients with off-market high-end properties, saw a 50 per cent increase in enquiries from Hong Kong this year. Hongkongers make up one-third of its clients in Asia with at least £1 million to spend versus one-tenth from China.

To prepare for the expected flood of applications, AWS Prime will open a satellite office in Hong Kong sometime next year, as well as one in Singapore, director Alexander Woodleigh-Smith said.

Bowers said his own property agents in the UK are in the process of relocating to Hong Kong “because they are so confident this is happening.” He likens the current situation in Hong Kong to pre-1997 handover.

“The only time comparable to today is before the handover,” Bowers added. “Everyone said ‘Oh, everyone is gonna leave’ and then not so many people did. But this is different. This is a line in the sand.”

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