HK investors flock back to prime homes in London

Transactions up 4.1pc per month over past year as global buyers move on with Covid-19

Emigrants from Hong Kong are among the global investors flocking back to London’s prime areas to snap up properties as the world gradually moves on to living with Covid-19.

Several districts in London are recording higher sales, according to property agents, as workers return to their offices amid easier travel rules and a top health official said the city might have seen the peak of the Omicron wave.

Transactions have increased by 4.1 per cent per month on average across the capital over the past year, according to property agency Bective. Sales in the firm’s prime central London offices have also risen 24 per cent on average.

“There are signs that momentum is starting to build,” said Marc von Grundherr, director of Benham and Reeves.

The recovery comes after the industry was battered by months of upheavals since the pandemic broke out in early 2020, slamming demand from foreign investors. Office workers, enabled by flexible working arrangements, chose properties outside the capital for their bigger spaces.

Hong Kong-based buyers, including those moving to Britain under the British National (Overseas) visa scheme, are likely to be among the most active investors. As many as 322,400 of these emigrants are likely to buy homes in the next five years, the British government estimates.

As of the third quarter of 2021, about 88,900 Hongkongers had applied for the scheme since its introduction in January last year, of which 76,176 had been approved, according to official data. The scheme offers an easier path to citizenship and was London’s response to Beijing’s imposition of a national security law in June 2021.

“Prime central London has always been a destination of choice for foreign buyers, Hongkongers included,” von Grundherr said.

Hong Kong buyers typically spend £700,000 (HK$7.4 million) to £800,000 for homes in Britain, he added. They tended to gravitate towards Highgate and Hampstead in north London, which offered a greater choice of large family homes and schools, von Grundherr said.

While prime central London values and activity levels have risen recently, the Omicron variant is likely to delay the market recovery, according to Frances Clacy, research analyst at Savills.

“The renewed Covid-19 uncertainty adds an unwelcome additional layer of doubt that is likely to push the expected bounce in values further into 2022,” she said. “We believe it’s a question of when, and not if, prices rebound, particularly as more pent-up demand builds.”