While different investors seem to be taking a different opinion on Brexit and the fall in the UK currency, Asian investors still have an appetite UK property. A report by JLL confirmed that Asian investors accounted for 28% of UK property transactions in 2016 which is up from 17% the previous year. This is a trend which will likely continue to rise especially when you bear in mind that two thirds of the global middle class will be living in Asia by 2030.
Despite concerns that London may be hit by any Brexit fallout, Asian investors still see London as something of a safe haven. Indeed many foreign investors have been buying up London property, taking advantage of the fall in the UK currency, with the intention of moving their family to the UK in the future and taking advantage of high-class education facilities. Asian investors seem to take a more rounded approach when investing in the UK, not just property investment but also lifestyle, which is not always prevalent with other overseas investors. One simple quote from a would-be Asian investor reads “London is London”. This really does just about say it all?
What is also interesting is the fact that London property prices do seem to be bottoming out after a difficult period. Constant buying by Asian investors will obviously have offered some support to the UK property market and it will be interesting to see how quickly prices do turn around.
One element of Asian investment which is often overlooked is the fact that the majority of Asian investors are cash buyers. This ensures no problem with chains, no mortgage issues and no increased payments as and when UK base rates move higher. As they say “cash is king” and this is certainly the case in the UK property market, offering significant power to potential buyers. It is also interesting to see that it is not only corporate entities from Asia investing the UK market but also the “general public”.
Chinese investment in the UK has increased dramatically over the last few years and indeed the last 12 months have seen an increase of 60% in enquiry numbers from Chinese buyers. While nobody really knows how Brexit will impact the UK property market it is interesting to see that many overseas investors seem to have more confidence in the UK market than UK investors. It may well be an advantage to be looking at the UK property market from a distance because sometimes you can be too close and it can be difficult to see the “woods for the trees”.
Despite the fact that the Chinese government does seem intent on restricting overseas investment this is not something which will continue forever and a day. Many Chinese investors are taking advantage of the reduction in sterling to diversify their portfolio and increase UK exposure.
Asian investors have long had an appetite for UK property but concerns regarding Brexit and a reduction in the UK currency seem to have strengthened this demand for UK property. We should continue to see ever increasing investment from China and with two thirds of the middle class expected to be living in Asia by 2030, there is a lot more money ready to flow through to the worldwide real estate market.