HONG KONG SAR - Media OutReach - 4 May 2021 - UK government projections for its British National (Overseas) (BNO) visa scheme to attract 150,000 applicants in the first 12 months and 300,000 within five years are firmly on track. In mid-April, just ten weeks post launch, 35,000 Hongkongers had applied for the visa. The scheme is open to 5.4 million Hong Kong residents in total.
The scheme's popularity is consistent with the 2020 research findings of UK Holmes, a London property search agent, on the subject of UK property investment. Of the 1,000 survey respondents, 80% indicated that they intended to apply for the BNO visa. Critically, these are people in the prime of their working lives:
- 70% are aged between 30-49
- 35% earn HKD1m plus and 9% have an annual income in excess of HKD2m
- 40% are employed in the finance and technology sectors.
London's strong financial and tech job markets
One of the major motivations to move to London was more diversified and professional job opportunities, with 58% of respondents affirmative on this point. Whilst both Brexit and the global pandemic have cast a pall on much of the UK economy, the outlook is considerably brighter for both finance and technology markets.
The City of London is second only to New York City in global financial rankings and is home to 402,000 finance sector employees. In defiance of gloomy predictions of job losses post Brexit, a 2020 Financial Times survey of 24 large international banks and asset managers found that the majority had increased their London headcount over the past five years.
According to the UK's Tech Nation Report 2021, London achieved stellar growth of 87% in tech investment from USD5.6bn in 2018 to USD10.6bn in 2020. But finding local talent is problematic. In March the BBC reported that a leading think tank, The Learning and Work Institute, identified that over the past six years there has been a 40% drop in students taking IT subjects at GCSE level. Accenture says that demand for AI, cloud and robotic skills is soaring.
Emigrants focus on schools and security
Looking at other motivational factors for the move to the UK, the report from UK Holmes found that 36% of respondents were focused on financial benefits. Significant areas of concern were access to good quality schools (36%) and neighborhood security (22%), indicative of the fact that a high proportion of these Hongkongers looking to start a new life in the UK are young families.
UK government steps up support for BNO visa holders
On April 8, the UK government announced a £43m support package for BNO visa holders arriving into the UK, of which £30.7m will go to councils across England to assist with English language training and housing support. A further £5m will be used to establish 12 "virtual" welcome hubs across the country that will provide local helplines advising on school admissions, registering with a doctor and even starting a business.
Hongkongers' mature outlook on London housing
On the subject of housing, Hongkongers have been prominent investors in London's new-build property developments in Prime Central London (PCL) over recent years. Yet the UK Holmes report identified that 75% of respondents are interested in looking at established properties. This apparent contradiction is explained by the fact that only 17% of respondents were 'pure' investors. A total of 42% were intending to initially buy a UK home for investment purposes before occupying within the first two years whilst 34% were intending to occupy their new home immediately.
In a sign of growing market maturity 65% of respondents stated a preference for employing a UK-based property search agent to assist with their home purchase, double the 32% who were inclined to use a Hong Kong based equivalent. Contrary to all expectations the London residential market experienced strong growth in 2020, posting average gains approaching 9%.
London market offers shrewd investors excellent opportunities
Reflecting on this, Terry Stephens, founder of UK Holmes, commented: "The London property market in 2020 produced some unexpected winners and losers. But the first point to acknowledge is that the government's economic rescue packages, both the furlough scheme and stamp duty holiday, underpinned the frenzy of sales activity and surging prices."
"Equally compelling was the reaction of London residents to lockdown as housing transformed into remote offices, gyms and education centers. This created a desire for increased space, both indoors and outdoors, and an exodus from inner London to its leafier outer suburbs. The winners were vendors selling semi-detached and detached houses. The luxury home market was also a significant beneficiary of the £15,000 stamp duty saving on properties valued at £500,000 or above."
"The losers were those selling flats, particularly those in Inner London, which experienced blowouts in time on the market and price drops. Aside from the change in buyer preferences, the market was also negatively impacted by a mass emigration of European immigrants due to Brexit and the trading embargo on high street hospitality and retail markets."
"But the story is more complex than that and, to the untrained eye, the uneven price performance of neighboring London boroughs looks bewildering. The bottom line is that the London market is actually a complex ecosystem of individual markets that are being distorted by a variety of forces, not all of which will prevail in the longer term. There are excellent buying opportunities in London in 2021 but this isn't a market for the faint-hearted. Before buyers take the plunge, they need to do their homework very well."
About UK Holmes
UK Holmes is a London-based residential property buying agent providing turnkey solutions for offshore buyers. UK Holmes employs London's House Detective, a property professional with 12 years' experience. His in-depth knowledge of how to successfully navigate the complexities and pitfalls of the London market to find customers their ideal home provides true peace of mind. To learn more, please visit www.ukholmes.com.