Where have all the Hong Kong investors gone? In the mid-1990s about one in 10 new homes built in central London's most desirable areas were bought by Hong Kong people, making the British property market their favourite outside of East Asia. Now there are barely any new investors coming to Britain. Top estate agency Savills, property finder Black Brick and investment property management company Pineflat have had no Hong Kong investors looking for property in the British capital this year. Estate agent Hurford Salvi Carr has had only 'a handful'. The decline in Hong Kong investment has been steady. According to estate agency Knight Frank, last year only 3 per cent of buyers in prime central London came from the Asia-Pacific, and Hong Kong buyers were only a fraction of that. A few developers have managed sales of apartments at exhibitions in Hong Kong this year. Berkeley Homes sold 12 apartments at its City Quarter project in London's East End during the summer and St George sold about 40 flats at several developments. But this is nothing compared with the heyday of 1997 when all 450 flats at St George's Metro Central Heights development in Elephant and Castle, south London, were sold to Hong Kong buyers. Perceptions that Britain's property market slump may be long and severe are partly to blame for the dearth in demand from Hong Kong. 'The British property market turned in September 2007 and has since lost 15 per cent of its value,' said David Salvi, partner at Hurford Salvi Carr. 'Although this now represents an opportunity to purchase prime London property at discounted rates from 2007 prices, negative press reports have resulted in international buyers looking to other countries to invest.' According to Camilla Dell, managing director of Black Brick, investors are playing safe. 'Our investment clients have tended to put their searches on hold for the time being due to the softening market conditions in London,' she said. 'They are waiting to see the market fall further and bottom out before buying again.' Mr Salvi said Hong Kong investors who took the plunge bought off-plan properties in the #500,000 to #2 million (HK$7 million to HK$28 million) range. They were banking on an early recovery in the housing market. 'They tend to have a large appetite for off-plan developments, where the initial outlay is 10 per cent or less, with the rest payable in stages over a few years,' he said. 'This appeals as their initial outlay of capital is low and in a rising property market they can 'flip' the property and make a profit without completing the sale. In terms of location, prime central London is where the majority of investors want to own.' Some Hong Kong investors buy property for the long term. According to Knight Frank, they may hold purchases for up to 10 years. Hong Kong-based British expatriates tend to buy a property as part of their pension plan, the agency's research shows. They go into the market when the pound is weak and sell when it is strong. More expats should be buying in Britain in the coming months because the pound has fallen against the Hong Kong dollar recently. British Chancellor of the Exchequer Alistair Darling is partly to thank for that. Mr Darling's recent comments that the world was facing its worst financial crisis for 60 years has knocked confidence in Britain's economy, contributing to the pound's latest falls. Mr Salvi said the falling pound would tempt Hong Kong investors back to the British capital. Robert Hadfield, managing director of Pineflat, said prices for newbuild properties must fall further before Hong Kong investors returned in numbers. 'Everyone needs to admit that the market was overheated,' he said. 'The development pipe of two bedroom-two bathroom flats is still pretty full so perhaps wise developers will be building more one, three or four bedroom flats in mixed developments.' Although Hong Kong investors are shy of putting new money into Britain at the moment it remains an important market for them because thousands already hold a property there, most of it in London. Liam Bailey, head of research at Knight Frank, said: 'The UK is the most popular investor destination outside of the Far East for Hong Kong buyers.' Outside of London regional centres Manchester and Liverpool have attracted Hong Kong investors since the 1990s. They favour locations close to major employment areas and amenities, especially transport links, and are less interested in prestigious 'destination addresses', Knight Frank research reveals. Future Hong Kong investors may be joined by mainland buyers when restrictions on Chinese individuals taking money abroad are finally addressed. According to wealth management company Scorpio Partnership, China has 373,000 high-net-worth individuals, the fifth-highest number in the world. Industry sources say many will want Kensington villas and other trophy properties in London. Chinese companies setting up operations in the city will want executive homes for senior staff.