Buying UK Property From Hong Kong in 2021 – that will be the topic of today’s article.
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The best time to consider your financial situation is when you are moving to a new country.
The United Kingdom has become an attractive place for Hong Kong residents to invest in recent years. In fact, Hong Kong residents are buying more houses and apartments to lease out for income in Britain. Since they became the fifth-largest foreign investors in central London, they have been driving up prices.
This is to tell you that there are countless opportunities to own a property in the UK. And these new waves of buying have also included some Hong Kong residents who are pooling money to invest. Surprisingly, the UK government is offering a new visa to Hong Kong holders of British National Overseas (BNO) to give them a chance to become British citizens.
However, those that secure this visa can apply for settlement after five years and British citizenship after 12 months. Besides, it’s becoming more of a trend in the past six months that many people are investing in UK property. Have you ever think of the reasons behind this fact and the benefits it offers?
Of course, there are tons of benefits you can get from the investment. Obviously, you’ve always heard of larger investment companies who bought a large amount of stock for future profit, right? Yes! That’s how it works in investment. And the UK has been the primary source of investment for foreigners in today’s world.
In this article, we will walk you through the reasons why Hong Kong buyers are purchasing property in the UK for investment. Aside from this fact, you’ll understand the tips for Hong Kong buyers looking to invest in UK property today. Would you like to check what we’ve unleashed? Read further to know more.
Why Hong Kong Buyers Are Purchasing Property
Hong Kong offers a thriving, international culture, a robust financial sector, and lower taxes to its residents. That said, it remains a famous home for UK expats. However, for the loved ones living abroad and the Hong Kong property market being difficult to profit from, many Hong Kong locals and expats are looking to the UK for their property investment. Now, take a look at why Hong Kong Invest.
Residency Visa Made Easy
The residency visa made easy has contributed to one reason why many people would want to buy UK property from Hong Kong. Until now, emigrating to the UK has never been so easy for both individuals and family units, but the BNO opportunity for a fresh start has added to the impetus in UK property interest. Now, there are no skills or income requirements; just prove of financial support can help.
Pandemic Allows for Sales Volume
With the advent of the global pandemic, there’s a huge sale in housing. More so, the highly regarded nationwide house price index for May, as reported by the BBC, showed that prices fell 1.7 percent from the previous month, the largest decline for 11 years.
As a result, it opens opportunities for price negotiations for serious buyers. Meanwhile, some developers are also offering incentives that could add up to thousands of pounds in savings.
Currency Exchange Rates
Aside from the fact that the pandemic affected several countries, the exchange rate still remains one factor in buying a home in the UK from Hong Kong. Not only that, but the British pound is at a historic low against the Hong Kong dollar. And this effectively means buying at a discount compared to the weak pounds in the previous years.
Temporary Relief on Stamp Duty
The temporary relief on stamp duty has also lead to the major reasons why Hong Kong buyers are purchasing a property from the UK. Until 31 March 2021, buyers will only have to pay stamp duty on properties over the amount of £500,000, but there are pandemic relief measures to boost the housing market. Moreover, the suspension of 2% stamp duty land Tax to overseas buyers is also a factor.
Low Interest from UK Mortgage
According to research, we discovered that 10 years fixed mortgage rates were at their lowest since recording began by the Bank of England at 2.44 percent. However, with a projected trend towards the low cost of borrowing, it still remains good news for people that require financing. And this could help Hong Kong residents own property in the United Kingdom with ease.
Top 7 Housing Tips for Hong Kong Buyers
The rich historical connection between Hong Kong and Great Britain has meant that the UK has long proved a widespread emigration and investment destination. With that being said, it is estimated that nearly 300,000 Hong Kong nationals will utilize this process to buy UK property from their country.
As China extends its influence on the city, more and more Hong Kongers are betting that the prospect of having at least one apartment in the UK will prove an advantage. Now, before you jump to buy a UK property, there are many things to consider. Without further ado, check out the seven tips mentioned below.
Where to Invest in the U.K
You might have been hearing that investment in United Kingdom property is the best choice as of 2021, right? Of course, investment in real estate is good but understanding the right place to invest is crucial. While London has historically been the default location of choice, housing prices have continued to rise. This way, you need to consider where to invest in UK property. In contrast, houses are relatively low in some states, such as Birmingham, compared to cities like Liverpool, London, and others.
How to Invest in the UK
Investment isn’t something that you’ll jump into without making proper research and recommendations. We believe purchasing options for Hong Kong buyers need to be considered. With this, you’ll know where to invest and how to invest your money to earn a potential return.
Moreover, purchasing an existing property can be a highly competitive process. And this could be a result of demand from local home buyers. In this case, you’ll need to get a solicitor and select the plot you’re interested in while you reserve the property quickly. Meanwhile, on completion, you’ll receive a brand new apartment with the benefit of appliance and construction guarantees.
For the sake of convenience, check our previous post on the benefits of investing in UK properties. Besides, read further to get a glimpse of what we’re saying. And for costs and efficiency, we recommend that Hong Kong buyers consider off-plan properties over existing housing stock.
Check Asset Liquidity
Asset liquidity is the third on our list. Many Hong Kong buyers are fortunate to have substantial sums of capital on hand to invest. On the other hand, if you’re searching for high-yielding property investment options, you might encounter brokers and agents offering property such as hotels. However, we encourage buyers to invest in residential property because of the long-term returns.
Therefore, for Hong Kong buyers seeking to maximize their returns, you should seek out residential property assets with the broadest appeal to potential future buyers.
Find a Reliable Mental Management
Finding a reliable rental or property management is another thing to take into consideration. For Hong Kong nationals, sourcing for a reliable lettings management partner is crucial. This will mean your property is well managed and maintained, and nobody would be scared about buying property from the UK.
Besides, since the UK property is well regulated, the quality of services offered by agents is different. This way, we recommend buyers to conduct due diligence before selecting their real estate agent carefully. Meanwhile, it may seem that this is a homogenous service, and therefore you can go for the cheapest options.
Check Mortgages for Hong Kong Nationals
Hong Kong buyers considered considering UK property investment today can leverage their capital by purchasing with a buy-to-let mortgage. In fact, this happens to be a common misconception that there are no mortgage products available to Hong Kong investors. This way, buyers should speak with brokers.
In addition, we advise buyers that would love to purchase a home to speak with mortgage specialist brokers such as in-house mortgage manager, to assess the Loan-to-Value and interest rates available to them. This way, Hong Kong buyers can secure mortgage financing while also having little experience in the lending market.
Buy Where Business is Booming
Another tip to consider when buying a house in the UK is to look for a place where business is booming. This is because; people tend to follow a better lifestyle when they’re in a booming environment. Moreover, a growing infrastructure has continued to attract business, and alongside this, an influx of young Hong Kong investors follows suit.
Seek for a Long-term Investment
As an expat or locals looking to buy property in the United Kingdom, it’s always better to look for a long-term investment. For this reason, investors from around the world can continue to invest in the UK buy-to-let property market due to its long-term stability and future potential. Also, owning property long-term can be a source of financial security. With mortgage rates remaining low, reductions in Stamp Duty and the rental market are showing continued positive growth. With that being said, now is the time to invest. Moreover, if you’re looking for more information about UK investment, get in touch with our team.
How to Make a Secure Investment in the UK
Over the past years, investors have brought up properties all across the country. And as of 2021, real estate still remains a big business among investors looking to increase their capital. While some shy away from real estate, as they may not understand the technical aspects, others clearly want to make a secure investment. With that being said, we have compiled this section to explain how to make a secure property in the United Kingdom.
Observe the Market
Too often, people tend to forget to research before looking to buy a property. If you’re considering purchasing any UK property, understanding the market is essential. For example, you could find a great deal on a home in a broken-down area that you might pass by because you see no value in it.
However, what if the surrounding areas were slowly gentrifying and within the next five years, this area becomes built up and hospitable. This way, you might lose out on a fantastic deal if you ignore what’s going on all around.
Know Why You’re Investing
Apparently, to make money, you need to understand what and why you’re investing. Of course, there’s more to simply making a quick buck in the real estate market. However, you need to set up yearly plans and exit strategies to see signs that things are going downhill. So, make sure you know why you’re investing before jumping to buy a property in the United Kingdom.
Don’t Be Ruled By Your Heart
Oftentimes, many people allow their hearts to make decisions for them. This is fine when dealing with family, but when it comes to business, it’s totally wrong. A good example is when you buy a house to perform a fix and flip; this way, you mustn’t overspend. Furthermore, you should set up a budget and stick to it. Not only that, but this also extends to the area and type of property you buy.
However, if you see something come up in the neighborhood you grew up in, you might be inclined to purchase on impulse due to the good memories the property provides. But, on the other hand, it might end up being a dud and results in you losing your shirt.
Ensure Your Investment Are Diverse
If you consider other states and cities in the United Kingdom, you’ll have more investment opportunities and better investments options. Moreover, diversifying your portfolio across an extensive geographical area also reduces volatility and preserves your assets. However, real estate is not as complicated as it may look, but there are some rules that you must abide by to get the most for your money.
Calculate Ongoing Expenses
If you’re buying an apartment to let in the United Kingdom, it’s always good to carefully calculate ongoing expenses. This is solely because; a buy to let investment isn’t the one that you can manage passively. And you’ll need to be involved in managing property because it’s more important to be aware of the ongoing expenses associated with the property you choose to buy in the long run.
Cost of Buying a House in the UK
When it comes to buying a house in the United Kingdom from Hong Kong, there are more costs to save for than you might even imagine. And in fact, budgeting properly will help you avoid nasty surprises further down the line. You can find more details about the cost of buying a house in the UK below.
Mortgage Cost in the UK
Undoubtedly, more than half of mortgages come with arrangement fees and other charges for setting up the loan. Meanwhile, these fees can typically range from around £100 to £1,700. And while it might seem like a no-brainer to go for a fee-free mortgage, you’ll often find that the deals come with higher rates. That said, if you have a mortgage that carries a fee but you can’t afford to pay, you can add it to your loan.
Valuation fees in the UK
When you’re applying for a mortgage, the lender will carry out a property valuation known as a valuation fee to check whether the home is worth roughly what you’re planning to pay for it. This way, the lender can arrange the valuation for you, but you may be expected to cover the cost. And the price is usually between £250 and £750.
House Survey Cost in the UK
If you’re in Hong Kong and you choose to buy a house in the United Kingdom, you should know that a house survey cost is essential. Your lender’s valuation survey only looks at how much the property is worth. And since they might not be for structural issues, you should always have an independent property survey. The most common type of survey includes the Rics HomeBuyer Report and a building survey.
Conveyance Fees in the UK
The conveyance fee is always the service rendered by a licensed solicitor to handle the legal aspects of your property. This process is called conveyance, as you might not be in the UK to monitor the transaction, survey, and other charges or expenses incurred during the process of buying the property.
Land Registry fees in the UK
According to the United Kingdom system, the Land Registry is a government department that keeps records of all registered properties in England and Wales. However, if you choose to buy any property in this area, the department charges a fee for registering a property with a new homeowner. And this fee will also vary depending on the property price, but you can expect to pay between £90 and £150.
Stamp Duty Costs in the UK
The stamp duty costs in the United Kingdom (especially England and Northern Ireland) have been temporarily increased as part of the government response towards the Covid-19 pandemic. On the other hand, a threshold of about £250,000 will apply on purchases between September to October. Besides, if you’re planning to purchase a buy-to-let property or second home in the United Kingdom, you may need to pay a specific 3 percent surcharge on the below rates.
|Property Price in Portion||Stamp Duty Rate|
|£300,000 (1st-time buyer)||Zero percent|
|£925,000 (1st-time buyer)||Five percent|
|£925,000 – £1.5m||Ten percent|
|£1.5m and above||Twelve percent|
Removable costs are charged depending on the furniture and fittings you have in your apartment. And since moving costs vary, it’s crucial to know the amount of money to pay. Meanwhile, once your new house is ready, there are regular costs you’ll have to cover too. Below are the FAQs about the property.
Frequently Asked Questions about Buying Property
How does an expat get a mortgage in the UK?
If you’d love to know how expat gets a mortgage, there are many things to consider. For you to get a mortgage in the UK, you must buy a home, buy an investment property, remortgage your UK home as an expat, remortgage your UK home as a rental property, remortgage your rented-out home as your residence, and many others to mention a few.
Does a country give citizenship for buying a house?
It may seem as though you might have been looking for this answer for quite a number of years, but we’ll tell you today that the answer is yes. Kitts and Nevis. St. Kitts and Nevis’s citizenship by investment program, launched in 1984, is the first citizenship by investment program. This scheme accepts investment for real estate or donation.
What’s the minimum amount to buy a house?
Before buying a house in the United Kingdom, you must know the minimum amount to buy a house. Generally, you need to try to save at least 5 percent of the cost of the home you’d like to purchase. A good example is when you want to buy a house costing £150,000; you may need to save at least £7,500, meaning 5 percent for the deposit.
How quickly can I exchange on the house?
As of the time of writing this article, we can tell you that it takes around eight to 12 weeks to reach the point where you’re ready to exchange contracts. However, the actual process is quite speedy, requiring a phone call between the buyers and seller’s solicitors. So, keep in mind that the process is straightforward.
What’s the cheapest country to buy citizenship?
As research made it known, Vanuatu has the most straightforward and cheapest citizenship by investment conditions in the world. In our study and ranking, we can tell you that the country’s program ranks third after Malta and Cyprus. This means it’s the fastest low-cost program where citizenship can be obtained in just a month.
Hong Kong residents are buying more houses and apartments to lease out in the UK. This, however, has a huge impact on the property market and could even give you a potential return. Since buying UK property from Hong Kong is a popular way of building financial security, you can take advantage of purchasing one today. For more information about the buying process, refer to the content above.