Interest In UK Property From Chinese Investors Surges As Sterling Slumps

Legal Experts Says Buyers From China And Middle East Undeterred By Brexit

27.07.2016

Kate Rawlings, Press Officer | 0114 274 4238

The UK has seen a surge of interest from Chinese investors looking to take advantage of the low value of sterling post-Brexit vote, by buying British property.

China’s biggest international property website, Juwai, said inquiries about UK property from Chinese buyers have been 40 per cent higher than average, in the four weeks since the historic vote for Britain to leave the EU.

The jump comes after months of Chinese interest in UK property dwindling, largely due to the slowdown of the Chinese economy in early 2016.

Although London accounts for over half of the properties bought by Chinese buyers, one reason they invest in the UK is for the educational institutions, for which parents purchase apartments for their children to live in.

This is reflected by the level of interest from the Chinese market in university cities such as Manchester, Birmingham, Sheffield, Cambridge and Oxford, and helps make the UK the most popular place in Europe for Chinese investors to buy property.

Chinese buyers are also showing keen interest in flats in northern cities, which have high rental yields, and are helping to boost the Government’s Northern Powerhouse plans.

Beijing Engineering Construction Group is investing £800m in Manchester’s Airport City development and last week Sheffield announced a 60-year, billion-pound construction deal with Sichuan Guodong Construction Group – the largest Chinese investment outside London.

The increasing interest in UK property comes at the same time as sales to Chinese buyers of US properties during the 12 months through to March fell for the first time since 2011, to $27.3 billion from $28.6 billion a year earlier, according to an annual research report released by the National Association of Realtors.

Expert Opinion
The fact is that one person’s loss is another person’s profit and while the UK is suffering from the economic fallout caused by Brexit, many people overseas are seizing the opportunity to grab bargain investment opportunities caused by the weak pound.

The fall in the value of sterling against the yuan since the EU referendum represents a healthy discount to Chinese investors looking to buy property in the UK. We’ve seen noticeably more interest from people in China and the Middle East looking for advice regarding investments here. Those investors we’ve encountered aren’t concerned about Brexit at all, they are savvy business people looking to make good deals. Some have cited well-publicised corporate investment in the UK since the referendum by businesses like Wells Fargo and GSK as clear indication that Brexit will not adversely affect the UK long-term.

With a new Government finally in place, the air of uncertainty and chaos which followed the Brexit vote has been replaced with a sense of stability. With sterling so low, all of a sudden bargain hunters have turned their eyes firmly back towards the UK.
Nick Rucker, Partner