Cashed-up Chinese buy prime flats in London

LONDON: A wave of affluent Chinese are investing in new blocks of flats rising in and around London's former wharves and docks -- now among the most sought-after locations in the city. Others are buying large homes in prime central London.

The mainly cashed-up buyers who do not depend on mortgage loans have been largely unaffected by the credit clampdown in China, which has triggered a sharp fall in mainland sales.

Estate agency Knight Frank reports that over the past 12 months, 31% of clients buying homes through its Canary Wharf offices were from China. Most were after 2-bedroom flats priced at £300,000 (RM1.47 million) to £600,000.

Their preferred location was Mill Harbour, near Canary Wharf, because they believe the 2012 Olympics in neighbouring Stratford will lift property values throughout East London, Knight Frank reports.

"Generally, we have found Chinese like to buy below the £1 million price point," said Meriam Makiya, a Knight Frank sales manager. "They prefer apartments on high floors with good views."

When buying in the suburbs, Chinese investors wanted locations with good transport links to the capital's city centre, she said. They also preferred developments that offered security and facilities like a gym or swimming pool.

"They buy and then visit the development after exchanging contracts," she said. "However, when purchasing property priced north of £1 million, they tend to come over to Britain before committing."

Estate agency Savills has sold two flats at NEO Bankside, a project near the Tate Modern art gallery, to Chinese investors who are increasingly making their presence felt in established prime central London.

"In 2009, Hong Kong and [mainland] buyers accounted for 5% of all foreign buyers in prime central London," said Liam Bailey, head of residential research for Knight Frank.

Mainland demand has increased despite credit tightening in China since most Chinese investors are cash-buyers and do not need a mortgage.

Gary Hersham, a director at West London estate agency Beauchamp Estates, said the first of 12 mainland buyers, all businessmen, appeared in his offices two months ago. They wanted homes valued at £1 million to £3 million in West London for mothers and children to live in, while the fathers stayed in China. Educating children in British schools was their main objective for buying these homes, he said. All bought with cash.

Budgets for Hersham's wealthiest Chinese clients reach £10 million.

"At the top-end of the range, we are seeing ‘high rollers’ who regularly come to London in order to ‘play at the tables’. They come into our offices from the various casinos in Curzon Street with the intention of buying a luxury pad for their children in prime Belgravia, Mayfair or Knightsbridge," Hersham said.

Guy Meacock, associate at buying agency Prime Purchase, said he was helping a Chinese family buy a £15 million house in Knightsbridge. The husband was planning to float his company on the stock exchange.

In the Home Counties, 20% of Prime Purchase clients looking for country homes come from Hong Kong and the mainland, compared to zero per cent a year ago. "They are taking advantage of the perceived weak pound," Meacock said.

The pound has fallen against most currencies over the past 12 months, including a 0.58% fall against the Hong Kong dollar and a 0.55% fall against the yuan.

The pound continues to wobble over fears that the UK general election will lead to a hung parliament in which no party has a majority. The markets are concerned this could delay the formation of the next government and decisive action being taken to tackle the country's budget deficit, which is heading towards 12% of gross domestic product, a level close to that of Greece. – South China Morning Post