Chinese buyers are supporting the UK property market
As property prices in the UK have fallen one group of buyers benefitting from cheaper prices are the Chinese.
Traditionally, wealthy Chinese buyers have bought properties in the UK especially near universities, for their sons or daughters to live in while studying in the cities. London, Cambridge, Oxford, and Edinburgh are popular locations as the children of affluent parents finish off their education in the UK. But other locations are desirable too, with Cranfield, near Bedford, being a very popular destination for post-graduate students and university towns such as Brighton being a preferred choice for those undergraduates who want to improve their English. Looking at the medical schools, the schools’ of engineering, universities like Leeds, Nottingham (as well as some of the London universities) where Mandarin speakers can study on highly renowned translating courses, indeed look at all the major universities, and you will find bright teenagers, who have been educated in both Mandarin and English, forming a significant percentage of overseas students. Often supporting them are successful parents willing and able to buy properties nearby for their children to stay in for the duration of the course.
This desire to support is often what motivates Chinese buyers to venture into the English property market.
Over the last few years more Chinese have also been buying solely for investment purposes arising out of the sky-high prices in their native market. Currently adding to the attractiveness of buying in the UK is the position of weaker sterling, which could mean a potential price reduction of around a third for Chinese buyers. The decline in the value of the pound and the low interest rates has made properties in the UK a bargain for Chinese investors. Many are looking to build property portfolios, especially if the rental yields look good at around 4 to 5%.
Affluent Chinese buyers sometimes prefer buying near water or “Shui” in Chinese as it symbolises wealth. This is especially important for people who believe in Feng shui, which is incredibly popular. Buyers are targeting new properties around London’s former wharves and docks as well as on the harbours and riversides in other major conurbations.
For larger country properties Chinese buyers are looking beyond London to the Home Counties, Surrey, Buckinghamshire and Kent. In fact around 20% of clients searching for country homes are said to be from Hong Kong and main land China. Penthouse suites, manor homes, new build and an occasional Scottish castle have been shown to be properties of interest to the Chinese market.
Chinese investors often make special trips to view sites of interest. Whilst many of the purchases are under the £1M mark there are a number of investors looking at properties worth many millions. Chinese investors have restricted buying opportunities in main land Chinese thus making other markets an attractive prospect. Roughly half are cash buyers typically looking for two or three bedroom properties for their children to use but increasing the parents keep the property for years as it can bring in a good rent.
UK developers are increasingly aware of this emerging market and are mounting major marketing campaigns at trade fairs in China and Far Eastern and investors are jetting into Britain to view developments.
When looking to buy aboard the Chinese buyers often state that they like the UK legal system, which, they report, makes them feel safe. Chinese buyers often prefer to use agents as they see the value that a buying agent can add in terms of providing market insight and intelligence. Because of the particular needs of Chinese buyers it is often helpful to have the support of a cultural mediator / translator to ensure the buying process is smooth and happy.