Amid political turmoil in Hong Kong, London is becoming the preferred destination for the wealthy Hong Kongers to relocate. Investment by people from Hong Kong has increased exponentially in the last few months as the political instability in Hong Kong grew after the extradition bill last year.
As China has imposed the draconian National Security Law on the city, the people of Hong Kong made investments worth millions of dollars to purchase a second home in London, so that they can re-locate at a short notice. In May, developers sold housing properties worth 25 million dollars to the residents of Hong Kong; and expect a good year ahead given the changes in the UK visa system in favour of Hongkongers.
“Hongkongers have always been very savvy property investors and they have long been invested in London – the recent proposed changes to the UK visa system in favour of Hongkongers certainly adds to the many reasons they may already have to buy a property there,” said Teow Leong Seng, President & CEO of Eco World International Berhad (EWI).
Since Brexit referendum, UK’s currency, Pound, has weakened consistently, and this made London an even more attracting destination for the rich people of Hong Kong. After China imposed the National Security Law, Britain offered to grant the right to live and work to 30 lakh Hongkongers- which will further encourage the residents of the city to buy a second property in London.
UK Prime Minister Boris Johnson has assured HongKongers that they will be given the right to live and work, which would “place them on a route to (British) citizenship”.
London has always been a popular destination and a “safe haven” for Hong Kong’s wealthy people. As per a research by Beauchamp Estates, a British property firm, 98,725 Hongkongers and 1,20,250 Chinese people own properties in London. The Chinese government placed severe restrictions on overseas investment to stop the flight of capital but the semi-autonomous territory has no such capital flight control, and therefore, the people of the city are increasingly investing in the British housing sector.
The luxury housing sector was struggling since the financial crisis and subsequent economic slowdown in mainland Europe and the United Kingdom. But, the extradition bill, which was imposed by the Communist government of China on Hong Kong in April last year, came as a blessing for the developers of luxury housing. In the last one year, thousands of Hongkongers have bought a second home in London, as they consider it “safe haven”.
“We are seeing masses of [Hongkongers] again,” says Steven Herd, chief executive of MyLondonHome, an estate agent. “What is going on in Hong Kong is driving people to look for a safe haven. It is partly about wealthy families making sure they have property elsewhere that is suitable for them to move into at short notice, and partly about them wishing to get their funds out of a volatile region.”
London has been a safe haven for the wealthy people of countries facing political turmoil for long. A decade ago, buyers from the Mediterranean flocked in London’s housing market in the wake of the Arab spring, and after that, the political transition in Saudi Arabia sustained the market. For four to five years, before China tried to impose extradition law on Hong Kong in April 2019, the market witnessed oversupply and limited demand. But, the Hong Kong turmoil came as a saviour to London’s luxury housing market.
