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Children’s education drives Chinese demand for UK property
Brief:Chinese buyers started flocking to the UK property market after the 2008 global financial crisis, and the trend is not showing any signs of slowing down.
 
Chinese buyers now account for about 20 per cent of new residential property transactions in London, up from just 5 per cent three years ago, said Andrew Hay, the global head of residential at property consultancy Knight Frank. And 80 per cent of Chinese buyers are primarily motivated by the education the UK offers, from junior schools to universities, he said.
 
“As more and more Chinese citizens want their children to be exposed to a global environment and the global economy, they think, ‘Let’s educate them abroad’,” said Hay.“And British education is considered to be very good.”
 
Chinese buyers started flocking to the UK property market after the 2008 global financial crisis, and the trend is not showing any signs of slowing down, Hay added.
 
The pound has weakened by 12 per cent against the Chinese yuan since last year’s Brexit referendum, which also contributed to increasing interest among Chinese parents and 
investors. “The currency is about 20 per cent cheaper, and because the school fees are expensive in England, it is a quite significant saving for them,” said Hay.
 
Chinese parents usually favour houses or flats near schools if they stay with their children, or flats in London, for when their children graduate from college and move to London for work. Flats in London usually cost from £600,000 (US$786,337) to £1.5 million.
 
Tighter control on capital outflows by Beijing since the beginning of this year has made purchasing property overseas harder, but many clients are coping by making the most out of the US$50,000 per person yearly foreign exchange quota with help from relatives and friends.
 
In addition, Chinese homebuyers are able to get mortgages in the UK of up to 70 per cent of a property’s value.
 
But hurdles could lie ahead, as stricter restrictions on foreign buyers of UK property are being debated upon by the UK government and may be rolled out in the future, said Allan Wilkinson, a director at accounting advisory firm Buzzacott.
 
“A number of measures have already been brought out to disincentivise people from buying a second home,” said Wilkinson. “There is a possibility that any new change in the tax code will target foreign buyers.”

Source:Soth China Morning Post

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