Taylor Scott International News
by Mark Benson on October 19, 2013 In what could be a major development for the UK property market, last week’s trade mission by Boris Johnson and Chancellor George Osborne seems to have attracted the attention of Chinese investors. This comes at a time when more Chinese investors have been signed up to the ongoing ABP’s Docklands regeneration project which is one of the major UK property projects ongoing at the moment. While there has always been genuine interest from Chinese investors toward UK property there is no doubt that interest has increased in light of the trade mission and ongoing relationship between China and the UK. Welcoming Chinese visitors When we look at the trade mission, further Chinese investment in the docklands regeneration project on top of the UK government’s announcement that wealthy Chinese individuals will now find it easier to live in the UK, through simplified immigration procedures, it seems we can expect a wave of Chinese investment in the medium to long term. If you look at many areas of the world, both property and non-property sectors, the Chinese government, Chinese investors and Chinese companies have become ever more prominent. Quote from PropertyForum.com : “Historically the UK property market has been dominated by home owner properties as opposed to rented properties which have often been the mainstay of markets such as the US.” One area which has attracted the attention of massive Chinese investment is South America where the vast majority of governments in the region have financial support programs in place with the Chinese government. Further overseas investment in the UK property market The general consensus of opinion is that the UK property market will move higher in the short to medium term although there is an outside chance we could see the creation of a house price bubble which might hold back short-term performance. It now looks as though Chinese investors could well pick up the slack, from any investors who are perhaps a little concerned about the UK property market, supporting further forward momentum. At this moment in time the main focus of property investment by Chinese entrepreneurs and businesses is mainly in and around London. London has gained a reputation over the last 50 years or so as one of the safest and most lucrative property markets in the world. Indeed in many ways the London property market moves ahead of the overall UK property market, both upwards and downwards, and is seen as an indicator of short to medium term performance across the whole market. Demand outstrips supply While there is no doubt that genuine interest in the UK property market is helping to support forward momentum there is also no doubt that a lack of suitable properties to quench demand is also a major issue. Whether or not some UK property owners will see this recent surge in property prices as a means of downsizing in the short to medium term remains to be seen. While a number may have been in the “negative equity” zone, the current economic situation in the UK will have improved this situation for many. It will be interesting to see whether there is an increase in the supply of properties for sale across the UK, and more predominantly in London, because this will be a major element dictating how far and how quickly UK property prices move. These are certainly interesting times for those with exposure, or those looking for exposure, to the UK property market! Taylor Scott International
Taylor Scott International, Taylor Scott
