With so many great investment options in the UK for Hong Kong buyers, we weigh up the two most popular choices – London and Manchester.
Why are Hong Kong Residents Attracted to the UK?
In an interview with the Financial Times, Mei Wong, Head of International Sales with Knight Frank, said that she believed the UK to be the best overseas investment market for Hong Kong investors. Among the reasons for this are the close historical ties between the UK and Hong Kong, currently manifesting in the historic announcement that BNO Passport Holders in Hong Kong have a fast track to UK citizenship. As well as this, the UK offers fantastic universities so parents in Hong Kong looking to send their children to study in the UK often buy property for their children to use as a home whilst studying.
Clearly, aside from the cultural attractions of the UK, there are many financial incentives for buying here. The average price of a property in the UK is £230,300 – considerably lower than property prices in Hong Kong. Add to this the tried-and-tested stability and growth of the UK property market (UK property prices have risen over 300% in the last 20 years) and the recent low value of sterling compared to other currencies, and the UK is a very attractive proposition. And this is not to mention the current factors such as the stamp duty holiday inviting investment from overseas buyers.
Where to Buy?
‘The sheer amount of interest in the UK property market after lockdown is hugely surprising’ says Stuart Marshall, CEO of Liquid Expat Mortgages. ‘Activity is actually out-performing what we were seeing before the lockdown. With so many options, it’s tough to know where to invest. There are obvious considerations that you want to take into account such as where you find most inviting to live, job prospects, and proximity to family in the UK. Most important for the purpose of investment, however, is how much you can earn from a property. But, a cursory look at the UK market will immediately show you that two of the best options are London and Manchester.’ So, where should Hong Kongers put their money?
London is usually the number one destination for investors outside of the UK. Not only is it the capital city but it has excellent transport links to the rest of the country and abroad. It boasts world-famous monuments, high-end property and is a hotspot for tourists all over the world. It’s the obvious choice for investors. But while many are favouring other areas of the UK – particularly the Northern cities – for good reason, there are still incentives to buying in the UK’s capital.
Stuart Marshall advises that ‘the premium properties in London are still well worth consideration if you’re looking at the top end of the market. Since 2014, prime London property has fallen in price by around 20%. In areas like Kensington and Chelsea where properties are often in excess of £2,000,000, this is quite a saving. Further, prime London property values are projected to grow by 15.7% by 2024 so buying now could mean massive earnings in the future. This is compared to a projected 4% growth on the price of normal properties in London. With a relatively depressed sterling, London is still a safe bet for those looking to snag a deal at the top end of the UK’s property market.
Manchester is quickly gaining on London as the number one spot in the UK for astute investment. Manchester is the UK’s largest regional economy outside of London, home to a rich range of cultures and people, and also holds a great deal of appeal for those looking to enjoy a vibrant social scene with many of the country’s best restaurants, bars and clubs.
From a financial perspective, not only is property in Manchester cheaper than both London and Hong Kong but Manchester has many other appealing growth figures such as:
- Manchester’s population is rising at 15 times the rate new homes are being built.
- The average growth in property price is projected to be over 17% by 2024.
- The predicted growth in rent prices are projected to be 16.5% by 2024.
‘Manchester’s Gross Value Added (GVA) currently sits at £62.8 billion, second only to London’ says Stuart Marshall. ‘But between 2016 and 2036, Manchester’s GVA is projected to grow by 45%. The North West in general is on the way up as a really competitive economy and a huge part of that is because of Manchester. In fact, Manchester is forecast to have the highest sales price and the highest rental growth of anywhere in the UK by 2024.’
‘With Manchester presenting such an attractive investment opportunity, it’s important to not just choose anywhere in the city in a dash to grab your ‘piece of the pie’. Developments are constantly appearing and it’s important to buy the right property. Talking to a broker can really help in this regard, as well as helping with the actual purchasing process itself.’
‘It’s clear that Manchester would be our choice for investors’ concludes Stuart Marshall. ‘The stats really speak for themselves, not to mention the constant anecdotal reasons we hear from people pushing Manchester as the best option – it has to be offering one of the most attractive balances of professional and social life in the UK. But London shouldn’t be forgotten about. It could well be the right option, depending on your goals. For example, if your child is looking to study at one of London’s prestigious universities like UCL or KCL. Or, if you’re looking to buy in the upper end of the market, London is still a great option.
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