East and south Asian buyers, particularly those from the Chinese mainland and Hong Kong, are now accounting for 35 percent of sales in new developments in London, making Chinese the most active overseas investors in the city, according to research.
“The recent tightening policy toward Chinese domestic property investment has led to an increased appetite for overseas real estate purchases,” said Randall Hall, chief executive officer of Savills China. “The appreciation of the yuan against major currencies over the past two years also meant that Chinese buyers could acquire foreign real estate assets at a bargain.”
The yuan has appreciated about 32 percent against the pound in the past two years.
In the meantime, the average cost of a British home rose 6.3 percent from a year earlier to 166,203 pounds (US$256,578) in June, Halifax, the mortgage lending division of Lloyds Banking Group Plc, said on July 8. Prices were 7.5 percent above their April 2009 trough and 17 percent below their peak of August 2007.
Overseas buyers of British properties also include parents who buy properties for their children seeking education there, the real estate advisor said. Upon the graduation of their children, they can not only receive rental income but also profit from the appreciation of the property.
For Chinese mainland investors, top overseas destinations for real estate investment include Britain, the United States, Australia and Hong Kong.