Brexit is proving no obstacle to Chinese investors, who remain hungry for a piece of the London property market.
In fact, recent research shows that the drop in sterling’s value has created an excellent opportunity for overseas investors in the UK property market.
Chinese Investors Remain Hungry for London Property Following Brexit
The founder and CEO of trading platform Investorist, Jon Ellis, explains: “The fall in sterling’s value after the Brexit vote led to many investors rushing to pick up property in the UK, which had suddenly become much more affordable. What we’re seeing now is the continuation of that trend, but with purchases by more risk-averse investors. The continuing reduction of the pound’s value has given many investors time to consider the Brexit implications from all angles, and most have decided that the UK is still a strong, viable option.”
The weeks following the Brexit vote have been incredibly busy for the property market, according to new figures.
Affinity Sunny Way, the overseas investment arm of Affinity Global Real Estate, has experienced a 10% rise in Chinese travellers, with Managing Director David Wei believing: “Lots of them come to buy property. A few companies dealing with [property investment] from China in the UK have become really busy and they’ve had to hire more people.”
Firms such as Investorist have also witnessed a significant increase in interest in the weeks following the EU referendum. The rise arrives after what has already been a busy period for Chinese buyers of UK property – Chinese investors accounted for 23% of all new residential property purchases in London over the past 18 months, according to Savills.
But the UK is not alone in experiencing huge Chinese appetite for property. CBRE reports that Chinese investment in the first half of the year totalled $16.1 billion – more than double the amount invested in the same period of 2015. The USA was a firm favourite in terms of total investment, while hotels and offices were the most popular property types.
Manson Zhao, the General Manager of Investorist in China, says: “China’s economic slowdown has had a big impact in terms of pushing investors to look overseas for their property investments. Countries like the US and UK offer the attraction of a stable environment – even despite Brexit – and higher returns than domestic investments. It’s a win-win for Chinese property investors, and the political and economic factors look well positioned to sustain the trend for quite some time.”
Although the news that Chinese investors are flocking into the London property market following Brexit might be good news for those in China, it may not prove too positive for struggling homeowners in the UK.
With a chronic housing crisis already hitting London particularly hard, overseas investment is unlikely to ease pressure on aspiring first time buyers.
What’s more, a recent report from the Residential Landlords Association warns that holiday let websites may be aggravating London’s housing crisis: /holiday-let-websites-adding-londons-housing-crisis/