2019 is the Year of UK Ready Made Investments for Hong Kong Investors
The rise of ‘pre-let residential properties’ in the UK has created an investment asset that can be easily adapted to an international strategy perfect for investments for Hong Kong Investors. Low-maintenance with immediate benefits, these ‘ready-made’ investments are able to remove the hassle that is usually associated with the early stages of an investment.
With the UK market currently experiencing incredible demand against a backdrop of undersupply, more and more international investors are looking to identify stable investment opportunities. Combined with Brexit uncertainty creating ‘discounts’ and a weakened Sterling, foreign investors are seeing their currency stretch further in prime investment locations.
The UK market remains popular with investors around the world – according to the SevenCapital Brexit Survey, 85% of current investors are investing within the property sector. Hong Kong is particularly interested in the market because of the returns and stability it can provide. 95% of Hong Kong investors don’t consider Brexit the most critical factor in their decision to invest in the UK, focusing instead on returns on investment (53%), market stability (43%) and good exchange rates (35%).
Below we explore how ‘ready-made’ investments and UK property trends are helping Hong Kong investors take advantage of a booming market to meet their investment goals.
UK Property Investment Trends
Demand for the Private Rented Sector
The UK property sector is a relatively secure market, offering robust past performance and a variety of investment opportunities in different locations. Worth nearly £1.29 trillion, the UK’s Buy-to-Let market is part of one of the fastest-growing sectors in the country.
It’s estimated that by 2023, the private rented sector will make up a quarter of the wider market. By 2039, renters will outnumber homeowners as the rise of ‘Generation Rent’ comes to fruition. With 300,000 new homes needed to meet demand as of Q4 2018, undersupply is a chronic issue that overshadows Brexit concerns for many international investors. Affordability is also causing an increase in long-term renters and 69% of tenants still expect to be renting in three years time.
The impact that this demand has had on the property sector is tangible – the average price of a UK apartment has risen by £1,250 each month since 2013, equating to around a £75,000 increase. Examining specific markets since the Brexit vote, Birmingham has led the way for growth in the UK with a 16% increase.
As new developments open up exciting possibilities for transport, residential, leisure and commercial spaces, we can see similar growth forecasts within the London Commuter Belt. A region benefitting from the decline of the traditionally popular London market, towns such as Slough and Bracknell are forecasting unprecedented growth and attracting investors that may have been drawn to the South because of the capital.
Over the next 20 years, the UK population is expected to rise to around 74 million, further impacting the demand affecting many of the major ‘first’ cities and increasing the likelihood that housing quotas are missed. It’s this competitive environment where a Buy-to-Let investment can thrive, fuelled by demand, growing rental yields and low-interest, creating a perfect storm of demand.
Hong Kong Investment in the UK
While global economic slowdown affects everybody, the unrest within the political landscape of Hong Kong (HK) has meant many domestic investors are turning to the wider UK market for a ‘safe haven’. Savills’ director of central London investment, Jonathan O’Regan said: “We are definitely seeing a recent upswing in investor interest from Hong Kong, which could be attributed to the political situation there.”
Even despite uncertainty surrounding the UK’s exit from the EU, the market has a reputation for security and Brexit is largely considered an opportunity for HK investors to catch the expected upturn in the market.
According to property agent Richard Leung, “Brexit is a buying opportunity… Sterling has weakened and London property prices fell in the first quarter. The major cities in the UK – Edinburgh, Birmingham, Manchester, Oxford and Cambridge – will remain brand cities after Brexit. Foreign investors will continue to buy there. It is easy and convenient for them to do so.”
Last year, in figures by estate agent Savills, London attracted $29.6 billion worth of cross-border capital – two-thirds more than nearest rival New York. The top investor in London property during 2018? Hong Kong at a value of £2.5 billion pounds. In 2019 however, central London has been overshadowed by outer London and the Commuter Belt, where regeneration has resulted in much higher potential growth and relatively more affordable property.
Ready-Made Investments in the UK
For Hong Kong investors that want a ‘hassle-free’, secure investment, a ready-made opportunity in the UK represents the ideal choice. With a tenant in-situ delivering immediate rental income within a fully-furnished apartment, these low-maintenance assets can adapt to many different investment strategies in a variety of locations. This makes them incredibly useful for generating wealth over the long-term, maximising net rental income from a location that is performing well today – avoiding a potentially lengthy or costly initial setup.
We have a number of ready-made investments available in prime locations across the UK, from Birmingham to the London Commuter Belt. Attracting attention overseas, these investments ensure immediate yields from unprecedented demand.
Located at the heart of Harborne, CopperBox is a prime development in one of Birmingham’s most sought-after postcodes. Voted one of the ‘best places to live’ by The Times, Harborne sits just 10-minutes from Birmingham’s core and can provide a relaxed village atmosphere just a stone’s throw from the buzz of the city centre.
A pre-tenanted, fully-furnished investment opportunity, CopperBox represents an attractive proposition – a contemporary development ready to deliver immediate rental income. As one of only three dedicated apartment developments in Harborne, CopperBox is an opportunity for professionals that want city-centre living with the benefits Harborne provides. Read more >
With a population of 172,000 and counting, Basingstoke is a major destination within the South East and one of the highest performing economies in the country. Rated the 3rd fastest growing town in 2018, we examine how Basingstoke has quickly emerged as a prime target for investment and the impact it’s had on the South East as a whole.
Churchill Place – a ready-made investment at the centre of Basingstoke – offers pre-tenanted and fully-furnished apartments, ready to start delivering immediate rental yields. The development itself is in a prime area of Basingstoke and epitomises luxury, with contemporary designs and spacious, open-plan apartments. Read more >