Lambeth in south London registered the highest proportion of reduced-price stock at 38 per cent.
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It is a good time for Hongkongers moving to the UK under the British National (Overseas) scheme to buy a home in London, with about a third of the homes listed for sale in the UK capital seeing their asking prices fall 20 per cent recently. About 35,000 homes, or 31 per cent of the total 110,780 residential properties listed for sale, saw their prices fall last month, according to property agency Benham and Reeves. "It's a fantastic time for Hong Kong buyers looking to relocate to the capital, and the vast majority will already have an idea of their budget and the areas in which they want to live," said Marc von Grundherr, director of Benham. "Our latest house price index shows that, on average, (some) London homes are selling for around 20 per cent less than the average asking price, so there is always some room for negotiation."
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team. The UK last year made it easier for 3 million Hongkongers who qualify for a BN(O) passport and their dependents to relocate to Britain and stay and work for extendable periods of 12 months, creating a path to citizenship.
About 123,000 to 153,700 BN(O) passport holders and their dependents were likely to move to the UK in the first year of the scheme, which began accepting applicants in January this year, and between 258,000 and 322,400 are likely to purchase a home there in the next five years, according to estimates by the British government. "The prime central London market has seen discounts of 20 per cent since the height of the market in 2015, and Hongkongers appreciate that discounts are now 'baked in'. And their key consideration is to acquire triple-A grade quality property that will appreciate well when the market returns to growth," said Andrew Weir, CEO of property agency London Central Portfolio.
Lambeth in south London registered the highest proportion of reduced-price stock at 38 per cent, followed by Hammersmith and Fulham with 37 per cent each, and Kensington and Chelsea and Wandsworth, at 36 per cent, according to Benham. Meanwhile, just 18 per cent of homes in Barking and Dagenham have had their asking price reduced, the lowest proportion of all London boroughs or districts. The decline in prices also comes as the UK reimposes at least a 5 per cent tax on property purchases in England and Northern Ireland. The tax was reintroduced last month, officially winding up a stamp duty holiday that began a year ago.
The reinstatement of the tax appeared to have an immediate effect on the property market, with UK home prices growing 7.6 per cent in July, the slowest in four months, according to mortgage lender Halifax. The latest price increase put average property prices at GBP261,221 (US£362,420). About 2,200 homes worth GBP1.1 billion were snapped up between July last year, when the UK announced the BN(O) visa scheme, and April by Hongkongers, according to an estimate by Benham.
So far, more than 34,000 have applied for the right to stay long-term in Britain under the programme, with 7,200 being approved as of May, government data shows. "Some areas such as Stratford, East London and Nine Elms, Central London where there is more stock than there is demand, we are able to negotiate a discount directly from the developer," said Thomas Balashev, the founder and managing director of Montague Real Estate. "Second is the secondary market of new build flat blocks. Because some buyers are incentivised by developers to buy directly it is possible for us to negotiate a discount from sellers directly.
We recently achieved a 16 per cent reduction in the asking price of a flat in Westminster on behalf of an Asian client." At least 30 per cent of the agency's transactions are likely to come from Hongkongers in the next two quarters, he added. For other agents, it is the developers of large schemes that are typically extending discounts.
"Some developers offer larger discounts depending on how well they are selling and in which location," said Mark Elliott, head of international residential at the property consultancy Savills based in Hong Kong. In July, Savills, through its network of offices across the UK, sold GBP21.2 million worth of properties to Hong Kong buyers, bringing its total sales this year so far to GBP109 million. "We expect to sell GBP250 million worth of property to Hongkongers by year end," Elliott said. More Articles from SCMP
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