Hongkongers heading to UK under BN(O) visa scheme undeterred by end of stamp duty holiday, surging home prices

London has reimposed at least a 5 per cent tax on property purchases in England and Northern Ireland, officially winding up a stamp duty holiday that began a year ago

As homebuyers rushed to beat the July 1 deadline, the UK’s average home price shot up 10 per cent year on year in May to £254,624

Reading Time:3 minutes

A pedestrian looks at residential sales displayed in the window of an estate agent in Loughborough, UK. Photo: Bloomberg

Published: 8:30am, 21 Jul 2021Updated: 11:12am, 21 Jul 2021

The end of a stamp duty holiday and surging home prices are unlikely to deter Hongkongers from continuing to buy properties in the UK as they move there under the British National (Overseas) scheme, according to analysts.

Since the beginning of this month, London has imposed a minimum 5 per cent tax on property purchases worth at least £250,000 (US$342,705) in England and Northern Ireland, officially winding up a stamp duty holiday that began a year ago. The end of the tax break means that the maximum tax saving has now fallen to £2,500 from £15,000.

As homebuyers rushed to beat the July 1 deadline, the UK’s average home price shot up 10 per cent in May to £254,624 from a year ago, almost back at the peak of £255,913 in March, according to government data.

Hongkongers, however, are likely to grit their teeth, pay the tax and shell out more money for a UK home.

“The choice to relocate to the other side of the world isn’t going to be made or broken on a saving of a few thousand pounds and we’ve seen a consistent stream of interest to continue to come from Hong Kong, despite the expiry of the initial stamp duty holiday,” said Marc von Grundherr, director at Benham and Reeves.

After the UK announced the BN(O) visa scheme in July last year, some 2,203 homes in London worth £1.1 billion had been snapped up by Hongkongers as of April, according to the London-based property agency.

“We have sold over £90 million worth of real estate in London this year,” said Mark Elliott, head of international residential at the property consultancy Savills based in Hong Kong. “In July, we have sold £7 million [worth of properties] month-to-date.”