Your Guide To Buying UK Property From Hong Kong



Hong Kong offers a thriving, international culture, a robust financial sector and lower taxes to its residents, making it a popular home for UK expats. But with loved ones living abroad and the Hong Kong property market being difficult to make a profit in, many expats and Hong Kong locals alike are looking overseas and to the UK for their property investments.

In today’s blog post, we’ll take a look at what investing in UK property looks like for Hong Kong residents. We’ll also talk about getting a UK mortgage, the best areas for your investment and how to acquire buy-to-let properties while living overseas.

The Hong Kong property market

Buying property in Hong Kong is both expensive and complicated, meaning that investing in property overseas is popular both for UK expats and Hong Kong natives. 

All the land in Hong Kong is owned by the state and a typical residential property costs 19.4 times the average Hong Kong salary. That’s why it’s no surprise that the administrative region has some of the lowest homeownership figures globally. The area has a housing shortage and property prices are skyrocketing despite government measures like high stamp duty. These factors have lead Hong Kong to the brink of a housing bubble. 

UK cities offer a lower barrier to entry for property investors and the country has generally more stable politics than Hong Kong. Additionally, UK property markets have more potential for steady growth and offer higher average rental incomes. More and more Hong Kong residents are now looking to invest in property in the UK: one UK building society saw an impressive 65% rise in buy-to-let mortgage completions from Hong Kong residents in 2017 alone.

Why invest in the UK

For UK nationals, investing in property in their native country is often an easy decision: they know the areas they want to invest in and often have family members living there who they want to buy a home for. That being said, Hong Kong natives who’ve never lived in the UK can also appreciate the many advantages that investing in property in the UK offers.

As we’ve gone over in previous blog posts, the UK is a popular among overseas investors due to its generally stable politics and economy as well as the growth of its property values in recent years. This growth is especially exciting in cities in the north of England and Scotland.

London is still the property market Hong Kong investors are most familiar with. However, with many tourists now visiting northern and Scottish cities like Manchester and Glasgow and news articles published about people leaving the capital behind due to unaffordable housing costs, non-UK investors are shifting their gazes to the north. 

The average yield in Scotland is now more than 5% higher than in London. Rent is also higher in proportion to property value in Scotland, making it more accessible to build a portfolio of several buy-to-let properties across the central belt. Coupled with the substantial price increases in Scottish markets over the past few years, a good return on investment is available to savvy overseas investors willing to do their homework and work with local property investment experts. 

Growth and investment opportunities in Scotland

As we’ve previously gone over in our blog articles, the property markets in Scotland are experiencing growth that makes for some excellent investment opportunities. In May 2019, the Scottish property market hit an 11-year high, with a year-on-year increase in property prices at 1.6% and the highest number of homes sold since the start of the recession.

While you might be looking to invest in property in Scotland as a second home or in order to offer affordable housing to family members living in the UK, building a portfolio of buy-to-let flats in Scotland is our recommended investment strategy. 

With a great deal of regeneration, large student populations and growth in sectors like tech and finance, there’s a growing demand for rental properties across Scotland’s central belt. Cities in the area also boast excellent rental yields, with the Edinburgh property market averaging 6.59% yield, while the same number is 6.49% in Glasgow. You can read about some of the best areas for your property investment in Edinburgh here and some of the best neighbourhoods for buying property in Glasgow here.

Getting a UK mortgage as an expatriate

Acquiring a mortgage as a non-UK resident provides its own challenges. However, working with a mortgage broker experienced in working with investors from Hong Kong makes the progress much easier. High street banks in the UK usually have rather limited finance options they can offer to overseas investors. That’s why the best option is usually going with specialist lenders who work with non-UK investors on a regular basis.

Remember also that even if you’ve found great professional success and a high salary in Hong Kong, this doesn’t necessarily translate to a good credit score in the UK. If your UK credit card has remained inactive since your move and you’ve not taken out a loan in the UK for a few years, your credit score will reflect this. 

Similarly, if you have any outstanding bills in the UK that you’ve forgotten to pay since your move, this will also have taken a toll on your credit score. This means you might be automatically rejected for a mortgage from a traditional bank, while niche lenders are able to work around this.

An interest-only mortgage is our recommended financing option for all property investors. This means your only regular repayment covers the interest on the capital you’ve borrowed. To pay back the capital borrowed, you’ll make overpayments when it suits you. This is great for the months your investment property is vacant and allows for penalty-free overpayment when you get something like a work bonus that allows you to make a large one-time payment. 

How Cox & Co can help

If you’ve not lived in the UK for several years – or ever – enlisting the help of a property investment manager in the area you’re looking to invest in is critically important. At Cox & Co, we pride ourselves on our ability to offer a truly complete, expert service for our overseas investors, many of whom live in Hong Kong.

With over ten years of experience in the Scottish property markets, we can source you the best properties for your investment, even if you don’t know the area you’re investing in well or can’t justify travelling to the UK to view properties. We specialise in sourcing income-producing properties across the central belt of Scotland that provide consistent capital growth over the term of your investment.

Not only that, but Cox & Co can also advise you on the best mortgage products available to you as an overseas investor and manage your buy-to-let flats on your behalf, making ours a truly turnkey service. This allows for a seamless investment experience with minimal time commitment on your part. 

If you’d like to learn more about starting your property investment portfolio with Cox & Co, get in touch with us today. The first for ‘Property Investment Management’.

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