More Hong Kong investors in UK property looking beyond London

PUBLISHED : Wednesday, 31 July, 2013, 12:00am
UPDATED : Wednesday, 31 July, 2013, 6:25am

More Hong Kong investors in British property are looking beyond London to other towns and cities outside London, estate agents say, and the increase is linked to the growing number of Hong Kong students attending British schools and universities.

Some Hong Kong parents buy properties for investment, while others who have bought accommodation for children studying in Britain help family and friends to buy too.

According to Britain's Higher Education Statistics Agency, the number of Hong Kong students at British universities rose 9 per cent from 10,440 to 11,335 between 2011 to 2012.

Hong Kong investor interest in Britain's regions has grown since 2008. According to property consultancy Savills, 38 per cent of their Hong Kong buyers in the re-sales market have bought property outside London over the past five years.

This year the target of Hong Kong investors has been studio apartments in purpose-built student accommodation blocks. These include Mi Place, a development opposite Aston University in Birmingham, marketed by Knight Frank. Prices for the 62 studios start at £83,500 (HK$996,000).

Hong Kong investors have also been buyers at two conventional residential schemes in Birmingham this year.

At The Hive, a 14-storey residential block between Aston University and the Selfridges department store, Hong Kong investors have bought 95 of the 149 flats sold so far. Prices start from £117,000 (HK$1,395,000). And at The Cube, in Birmingham's Mailbox shopping district, 31 apartments have been sold to Hong Kong and mainland Chinese buyers so far.

Mark Evans, partner at Knight Frank, said Hong Kong investors started trickling into Birmingham in 2008, and have since become a significant source of demand in the new-build market. "The typical Hong Kong purchaser will spread news of a successful deal to friends and family, often resulting in several linked purchases at the same development," he said.

The investors were attracted to the higher yields available outside of the capital. In Birmingham, gross yields of up to 8 per cent are possible, but in prime central London, they are between 3 to 4 per cent.

Hong Kong buyers are also turning up in cities they rarely entered before, and in the university city of Bath, Savills has dealt with nine Hong Kong investors this year compared to only one in 2012.

Nine out of 23 flats at The Crescent, part of Bristol's Harbourside development, have been sold to Hong Kong buyers, and in Edinburgh, Scotland, Savills sold eight homes to Hong Kong investors in 2012, compared to only one in 2011.

Much Hong Kong investment is centred on Oxford and Cambridge, where Britain's two best universities are based. Savills sold 60 flats to Hong Kong buyers at three Cambridge projects.

Other overseas buyers are joining in. Ed Meyer, Savills' head of residential sales in Cambridge, said the city has attracted buyers from across the world. "Nowadays approximately 20 per cent of our buyers are international whereas in 2009 this figure was only about 5 per cent," he said.