UK Property Investment From China
There has been a constant interest in UK property investment from China. The market has been attracting investment from international buyers in the droves. It is reported that international buyers, largely from the Asia and the Middle East are accounting for up to 85% of sales in new build developments in popular London hot-spots. China have shown a large appetite for global property over recent years, which has not stopped. Here we look into the likely activity and demand from China over the course of 2016. The Chinese stock market over recent months has been immensely volatile. With the Shanghai Stock Exchange closing after experiencing significant price drops in a trading day. This has been a cause for concern for Asian investors and global investors with large exposure. It has raised the question regarding China’s economy and its ability to withstand such shocks. With the Yuan dropping against a basket of currencies and government measures to control the flow of capital out of the country The question remains will the demand for property from China continue.
China’s appetite for high yielding property
The market driver behind the majority of buyers from China is for investment. Historically, we have seen an emphasis from this region on capital growth being the main investor focus. Furthermore, moving into 2016, it seems investors are also showing a large appetite for high yielding property assets. Due to the sharp increase in London property prices since the global crisis, the rental yields have decreased. The yields achievable in the Northern cities; Manchester and Liverpool, add to the attraction of buying in the ‘Northern Powerhouse’. The yields are far higher, additionally it is now being viewed that due to the developing infrastructure and investment. Moreover, there is also a greater opportunity for capital appreciation.
Key Developments attracting Investment from China
Developments in infrastructure are luring UK Property Investment from China. Key developments such as HS2, which will link Manchester Piccadilly and London in 1 hour, the extension to Manchester’s tram system and the £1bn airport transformation, demonstrate the long term growth potential of the ‘Northern Powerhouse’. Additionally, the rise in Stamp Duty Land Tax introduced earlier this year, has meant that expensive London properties weaken the appeal. The additional 3% payable for buy to let investors acts in some degree as a deterrent from expensive London property. Consequently, this has steered UK Property Investment from China to the North of England.
China’s confidence in the UK property market
The confidence in the North of England as a location UK Property Investment from China market is rising, as now Manchester is not just receiving investment from property buyers, it is also coming from property builders. The Beijing Engineering Construction Group are developing Manchester’s Airport City, a whopping £800m site. Set to be a hub for Chinese businesses, where street names will be in both English and Mandarin. China’s President Xi Jinping, conducted a site visit last year to the Manchester’s Airport city, this show of backing from such an influential figure has boosted Chinese investor confidence in Manchester.
Cultural ties between China and the UK
Liverpool Chinatown is the first Chinatown established in Europe and it is estimated that there now are around 10,000 Chinese residents in the surrounding area. The rate of this population is set to grow in Liverpool and in Manchester due to the strong cultural ties and the established universities. There is a growing number of international students coming from from mainland China, Taiwan, Hong Kong and other parts of Southeast Asia. Manchester is highly accessible to Asia, with Manchester having direct flights to both Hong Kong and Beijing. Buyers in the UK and China have a common denominator in their view of property as an asset class. Both countries widely view investment into property as one of the best long term investment options available. With capital controls set to loosen and the critical shortage of homes available in the UK, UK property investment from China is set to continue. If you enjoyed this post, please click the following links below for related articles. Stamp Duty Reform, 2016 Budget Why Invest in Manchester? Why Invest in Liverpool?
