Hong Kong vs UK property market

Nighttime Honk Kong view from Sea

The world economy has seen widespread fallout from the coronavirus outbreak but other factors such as political unrest and economic uncertainty have led Hong Kong even further away from its reputed status as a free, fair and thriving region and moreover a safe and sure location for investors. Whilst the UK has not been totally unscathed by Covid-19 as lockdown put the economy on pause and Brexit and trade negotiations are ongoing – the issues are far less volatile than those in Hong Kong.

Uncertainty usually presents opportunity and investors tend to circle like sharks when there’s blood in the water, hoping to snatch a good deal but, and it’s a big but, there must be strong prospects for growth in the future. Even the most ruthless of investors are calculated in their approach and will only gamble on a certain level of risk and for many, the Hong Kong property market is currently too precarious.  

It is widely being reported that those leaving and extracting capital from the Asian financial hub are increasingly turning to the UK – it is timely to consider Hong Kong vs UK property market and which currently presents a better balance of opportunity and risk.

Hong Kong property market 2020

Hong Kong is reported to have the most expensive property market in the world, with real estate giant CBRE reporting that the average property price in Hong Kong was ($US)1,235,220 in mid-2019. Comparatively the same report placed London, the UK’s most expensive city, at the 8th most expensive housing market in the world with an average price of just ($US)646,973. Most expensive does not necessarily mean most secure.

At the beginning of August 2020, it was reported that foreclosures on property in Hong Kong had jumped 54% in the first seven months of the year and analysts are predicting prices to fall significantly both this year and next as the economy has been deeply impacted by both the coronavirus and anti-government protests.

The recently passed national security bill is expected to cause a mass exodus of capital from Hong Kong and last year the city entered its first recession which was only exacerbated by the coronavirus outbreak. Along with the impact to residential property, commercial property tycoons are being heavily affected having already lost billions and predictions that office rents might drop by as much as 20% this year.

UK property market 2020

Whilst the UK property market has undeniably been affected by the uncertainty surrounding Brexit and impact of Covid-19 and subsequent lockdown there are green shoots and promising early indications for a property market that has proven its resilience time and time again.

The UK government has put in place a number of measures to support the property market over the coming months, having opened the sector for business first coming out of lockdown. Pent up demand caused an initial flurry with buyers and sellers wanting to continue with their plans and the announcement of a stamp duty land tax holiday has encouraged strong levels of activity across the UK property market and property prices are rising once more.

Hong Kong BN(O) Visa

On the 22 July 2020, the UK government announced a new visa policy created specifically with the three million British National (Overseas) passport holders in Hong Kong in mind.

Whether they’re inside or outside of the UK, from January 2021 Hong Kong’s BN(O) passport holders can apply for the special visa which will allow them to work and study in the UK for up to five years. After this period, those who come to the UK via this route will be able to apply for settlement and can then seek citizenship after a further year.

Where to buy investment property in the UK?

It was recently reported that Hong Kong residents were focusing their attentions on property in the North West of England. The North West is an area Thirlmere Deacon have championed for quite some time – with strong rental yields, high demand from professional tenants, buoyant economic growth and excellent capital growth potential, it is an area ripe for investment.

Across the rest of the country, there are several tertiary locations, small towns and cities located on the edge of larger economic hubs, that appeal greatly to tenants seeking a more affordable place to live without the busyness of a large city yet still within a very short commute of their place of work – we currently have access to a number of exciting opportunities in these types of locations.

UK property investment

If you’re planning on investing in property and would like an experienced property consultant to guide your search for the right opportunity to suit your budget and requirements please do get in touch. We’re available via email info@thirlmeredeacon.com or call us on +44 (0) 2039507939.