Chinese investors looking beyond London

Leveraging on the weak pound and strong yields, Chinese investors are looking at the UK’s regional cities for new build investment properties, said lettings specialist Assetz.

Affected by the red-hot property market in many Chinese cities like Shanghai and Beijing, theseĀ ChineseĀ investors are being drawn to the UK’s strong private rental sector which offers yields of about eight percent.
They are looking for higher income opportunities in places such as Leeds and Manchester given that the price growth in central London has moderated.

Each year, Chinese nationals are permitted by their government to move US$50,000 (S$61,737) abroad. Although Beijing offers weak yields, house price increases in the city stand at around 10 percent, making London an unlikely place to invest for capital growth. Stuart Law, Chief Executive of Assetz, noted that “interest in London as an investment destination” has moderated as it offers slow capital growth and lower yields.

In comparison, regional cities provide higher yields, “particularly new developments targeted at young professional tenants”. Meanwhile, Bank of China is offering sterling mortgages with 60 – 70 percent loan-to-value (LTV) to Chinese investors.

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