Chinese appetite for UK property rose by a third in the last three months of 2016, with Northern Powerhouse cities receiving the majority of interest.
- Chinese interest in UK property grew by a third in the last quarter of 2016
- Growth in interest attributed to the plummeting sterling rate and a hike in Hong Kong stamp duty
- The majority of Chinese investors are moving away from central London property and looking to other UK cities, with Manchester a particularly popular choice.
Chinese interest in UK property has increased dramatically in recent months, with the last quarter of 2016 seeing the number of enquiries from Chinese investors grow by a third.
Consultant Arcadis, attributed the spike in interest to the weak pound, following the UK’s decision to leave the EU last June, which saw the sterling exchange rate plummet to the lowest level in 31 years, rendering UK property considerably less expensive to overseas investors.
Mark Cleverly, Head of Commercial Development at Arcadis, said: “Since the referendum vote on Brexit, we have seen more Chinese development companies looking to acquire UK development sites or existing assets. They currently enjoy a discount against sterling, so they are actively seeking new global investment opportunities to counter a downturn in their own domestic markets.”
According to Arcadis, Chinese interest is also moving away from central London and towards those UK cities which offer attractive growth prospects as a result of factors, including strong population growth, lower land values, low interest rates and more affordable house prices.
Named by HSBC in 2016 as the city with the highest yields in Britain, Manchester in particular is seeing a substantial increase in interest from overseas investors. With a booming rental population, the rise of the Northern Powerhouse and both home and land prices considerably lower than London, Manchester offers great investment potential for well capitalised developers.