Partner Article

Chinese Investors Buying UK Property Despite Capital Controls

Chinese investors have been buying property in the UK for years. They have often bought off-plan and then either rented, held as an investment or used as a summer residence when travelling to the UK.

There was an element of uncertainty once London decided to leave the EU, which initially held off any buy and sell transactions as investors wanted to take the wait and see approach. However, the Chinese investors are back and Brexit is no longer a concern, today we are dealing with capital controls which prohibits Chinese buyers purchasing more than $50,000 of foreign currency/property or else.

This is $50,000 per annum and is reset on January 1st of each year.

When there is a will there is a way and there are certainly leaks in the system. When China announced capital controls it done a good job in slowing outward flows of capital but it done more harm to confidence.

Investors from Chinar are looking to London as a safe place to keep their money, this is very much about wealth preservation and protecting themselves from the weakening of the Chinese Yuan. In other ways, we are seeing Chinese buyers measuring their achievements by what they own, a second home in London is used as a barometer for success.

We are seeing Chinese buyers approach other areas of the capital, up until 2013 it was all about the centre of London. Buyers are seeking cheaper property and with better transport links, there is no reason to pay the bumper price that central London affords.

While we are not going to see the real changes from Brexit for at least the next couple of years, we can already see that London is opening itself up to the international markets and China is set to be a big beneficiary of trade deals. The United Kingdom is going to want to trade with all the worlds super powers and vice versa.

While it is true, Chinese buyers do go for already built properties we are seeing a big number of off-plan developments being marketed exclusively to Asian investors.

Investors are aware that property prices in London are on the rise, with bargains to be had thanks to the 10% to 15% drop in the value of the Pound.

Even with rising prices we are sure that capital controls are enough to push Chinese investors to find a way to move money out of the mainland. Often, we are seeing Chinese buyers with money in bank accounts outside of the country.

Capital controls have been expected for a long time and while most investors had already made contingency plans for such actions from the Government in China, there are some investors are left reacting to the changes.

The bottom line is Chinese buyers are seeking property investments that are safe and come with potential. The UK has long been known to respect the rights of investors and the Chinese know that when they own property in the UK, they truly own that property and can sell that property without restrictions.

The UK is likely to be a big beneficiary of the capital controls China has put in place. With or without these controls, investment from China will continue.

FJP Investment is a team of investment specialists sourcing a wide range of investment opportunities both in the UK and overseas. Deals include the Pegasus Agriculture hydroponics investment. Full information can be requested from the website www.fjpinvestment.co.uk or by calling the team on 02071830343

This was posted in Bdaily's Members' News section by FJP Investment .