Pound Weakness Presents Opportunity... Hong Kong Residents Flock to UK Real Estate

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Hyunjung] The South China Morning Post (SCMP) reported on the 11th that due to the weakness of the British pound, external investors including Hong Kong residents are flocking to the UK real estate market.

According to the report, since the UK introduced a fast-track residency scheme last year for Hong Kong residents holding British passports, the number of Hong Kong people wishing to purchase homes in the UK has rapidly increased recently.

Nina Coulter, Residential Development Sales Director at Savills, the UK's largest real estate service company, explained, "The pound has hit its lowest point against the dollar since early July 2020," adding, "The decline in the pound's value makes UK housing more attractive to Hong Kong buyers." She further noted, "Whenever the pound's value falls more than 5% against the dollar, inquiries from Hong Kong buyers about London properties tend to increase by more than 10%."

According to official government data, 104,000 Hong Kong residents applied to migrate to the UK under the fast-track residency scheme last year, with 93% of them approved. The UK government estimates that 322,400 immigrants from Hong Kong will purchase homes in the UK by 2026.

With the UK’s economy expected to contract recently, further depreciation of the pound is likely. Last week, the monetary authorities implemented the fourth interest rate hike since December to curb consumer price inflation.

Tom Bill, Head of Residential Research at Knight Frank, a UK-based global real estate consulting group, analyzed, "Hong Kong buyers tend to be well-informed and pay close attention to movements in global financial markets. Therefore, the currency value discount offered in the UK after the Brexit vote would have been a significant driver of demand, and the pound’s weakness will have a similar effect."

According to Halifax, a mortgage lender’s proprietary index, the average house price in the UK rose by 1.1% in April, marking the tenth consecutive month of increases. This is the longest upward trend since 2016.

This content was produced with the assistance of AI translation services.