Are Chinese investors still buying in London?
Yes, we continue to see an increasing numbers of Chinese buyers. Those making the headlines are the super wealthy buying trophy assets but most are ordinary investors spending up to £550,000 on a rental property, typically a one- or two-bedroom apartment. For 80% of these, the property is solely a buy-to-let investment while 20% purchase for children studying here.
The Chinese consider property an important part of their portfolios but their own market has cooling measures limiting domestic property buying so they look to London with its proven track record and transparent legal and financial systems. Generally, interest in the UK from residents of mainland China is actually growing. For example, in 1997 there were 5,800 Chinese students in the UK, but by 2016 that figure had risen to 160,000. Chinese parents value an English university education for their children, so this figure is likely to grow while often those studying here continue to live and work here after university.
To meet the growing demand from investors, we have a dedicated China desk in London manned by tri-lingual staff. Our Hong Kong office had been looking after our China clients for the past 20 years and so we opened an office in Shanghai a few months ago and will open another soon in Beijing. The Chinese tend to trust their own networks of friends and family for advice and having a local Chinese property professional working with investors is important.
Working with Chinese investors is exciting but they have a painstaking approach. From an initial meeting, a typical first-time buyer spends 100 hours before making their investment decision. This is understandable as they do not know the complexities of the London property market – where to buy, how the buying process works and how UK legal and financial processes operate so this needs to be explained. We translate and explain every document, supply information videos and talk through every issue in Chinese.
But while extremely cautious, most Chinese invest for long-term growth so immediate political and economic ups and downs do not worry them unduly.
Benham and Reeves Residential Lettings