China’s economy is booming, its middle class is expanding and its citizens are getting richer and richer. As a result, more and more Chinese individuals and businesses have money to invest, and thanks to the UK’s ongoing property boom, many of these investors are putting their money in British bricks and mortar.
In 2014, Chinese investors spent £38bn on international investments, with a large percentage of that cash spent on UK addresses. With many experts predicting just 3% of Chinese investors have so far been found, the potential for growth in international property investment is almost endless.
One of the main reasons that Chinese investors are attracted to the UK is that the country is seen as a safe investment. Property prices have been rising steadily since the financial crash, with locations like London performing especially strongly when compared to the international market.
Investors can expect rental returns of up to 18% in London, with regions like Norfolk and the Home Counties offering ROIs of between 7%-10%. On top of rental income, speculators will see an almost guaranteed increase in the base value of their property, ensuring a good return when they come to sell.
If Chinese investment in the UK was on the up before the Brexit vote, the dramatic fall of the Pound against the Yuan has made UK property even more attractive. The price of investing in even the most exclusive developments has suddenly tumbled, with the pound down 12% against the Yuan in the days following the vote. Recently, the pound has fallen further, giving Chinese investors even more incentive to put their money in UK property.
Global business hub
As well as being a safe investment, the UK is a global business hub with excellent transport links to EU and international destinations. Chinese investors see this as a major benefit, with many seeing an investment in UK property as a stepping stone to international business.
As more and more Chinese investors put their money in UK property, their search zones are getting larger, with the Home Counties, East Anglia and northern cities like Manchester, Newcastle and Birmingham all attracting significant interest. This is especially true now that London Mayor Sadiq Khan has announced a review into international investment in the capital, with Chinese buyers now looking for alternative destinations for their money.
With the pound at a 30-year low, new development cropping up across the country and China’s middle class expanding at breakneck speed, Chinese investment in UK property shows no sign of slowing down anytime soon.
To find out more about the local and national property market, or if you would like to chat about anything to do with property investment, give us a ring on Norwich 01603 567804 or send us a message.
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