UK Property Market Expected to See An Influx of Chinese Investors

Over 21 million Chinese travellers are preparing to celebrate Golden Week around the globe, and many are looking to invest in property.

The longest holiday break of the year, starting from 1st October, China’s National Day Golden Week is known for being the most active time of the year for overseas property investment.

In celebration of the founding of the People’s Republic of China, Golden Week sees citizens travelling around the country and abroad on holiday.

During this time, many wealthy Chinese investors will take the opportunity to combine business and pleasure to investigate foreign markets first-hand, typically with significant amounts of money on offer.

For example, according to Retail Gazette, in 2015, UK retailers were predicted to have seen around £600m in sales, with Chinese tourists being some of the biggest spenders in the UK market during this time.

This year, over 21 million investors are expected to celebrate Golden Week around the globe, with many looking to invest in property.

China is already the world’s largest outbound real estate investor, and its appetite for overseas property is anticipated to only grow in the future.

According to a report by EY, the number of Chinese households in the high-income category that can afford to purchase international real estate is likely to increase by 50% by 2025.

This growth is fueled by several factors, including:

• An increase in income: China’s middle class is growing rapidly, and with it, the number of households with disposable income to invest in international property.
• High savings rates: Chinese consumers have historically high savings rates, which gives them a significant pool of capital to draw from when buying a property from overseas.
• Diversification: Many Chinese investors want to diversify their portfolios by investing in international real estate. This is seen as a way to reduce risk and generate higher returns.
• Lifestyle changes: Some Chinese investors are also buying international property as a second home or for investment purposes.

The growing demand for international real estate from Chinese consumers is likely to impact the global property market significantly.

According to Juwai IQI, UK property is one of the popular choices in 2023 for Chinese investors, with a variety of investment opportunities, including residential, commercial, and industrial properties, as well as serviced accommodation, being particularly attractive to investors.

In addition to driving up prices in popular destinations, Chinese investors are also expected to have a broader impact on the global property market. For example, they may drive demand for new types of properties, such as luxury homes or retirement communities. They may also lead to increased investment in infrastructure and development.

Overall, the growing demand for international real estate from Chinese consumers is a positive development for the global property market. It will likely lead to increased investment, job creation, and economic growth in popular destinations.

Chinese investment in UK property has traditionally been concentrated in London, but many investors are now turning to the North West due to its attractive property prices.

New apartments for sale in Liverpool and Manchester, in particular, are expected to see a higher 5-year projected growth (11.7%) compared to London (-1.7%). These cities also offer properties with excellent value for money for foreign investors. Learn more about Chinese investment in UK markets with our dedicated property resource.

For example, Liverpool’s average rent is £1,058, and property prices are £177,224, giving an average rental yield of 7.16%. This is significantly higher than the national average rental yield of 5.5%, with some areas in the city, such as the Baltic Triangle and Anfield, potentially offering even higher yields.

For a detailed breakdown of the costs involved with property, take a look at our UK Buy-to-Let Cost guide.