We are now into the second quarter of 2021 and the vaccine rollout here in the UK continues at speed. While 2020 saw a 40% decline in visa applicants due to the pandemic, the success of the vaccine campaign, the slowing of the pandemic in the UK, and the continued political instability around the world mean the Tier 1 investor scheme could be set to grow again in 2021. The UK remains a safe haven for both health and political reasons.
Hong Kong has faced over two years of political hardships. It has led to a wave of departures over the past 18 months. As the pace of Hong Kong emigrations accelerates, London is emerging as a favourite destination among high-net-worth individuals.
According to Astons, Hong Kong residents represented the second-largest foreign buyer group in prime central London in the first three quarters of 2020. They accounted for 9.2% of foreign property purchases and spent an estimated £305.5 million across 243 transactions.
In Q4 of 2020, estate agent Benham and Reeves recorded a 63% year-over-year increase in foreign buyer demand from Hong Kong, and interest has only accelerated since. In January, it saw a 73% year-on-year rise in interest, and in February demand jumped 200%.
According to Benham and Reeves, the vast majority of Hong Kong residents that are interested in London are looking to buy residential property in anticipation of a possible permanent relocation. Some, who want to relocate their businesses as well as their families, have also expressed interest in commercial property. (The spike in demand is also likely linked to the upcoming 2% increase in stamp duty tax for foreign buyers, which comes into effect this month).
Residential property in London, specifically in the prime areas of Knightsbridge, Mayfair and Marylebone have always been appealing to foreign investors, specifically those looking to stay in the UK for the long term. As the pandemic eases in the UK, according to research, London will see a decline in population for the first time in a decade. A number of central London residents will be looking to move to the suburbs of London and counties with close London train links, meaning there will be a great choice of residential and commercial properties for those from Hong Kong and elsewhere to choose from.
Residents from Hong Kong also see the appeal of Central London due to the growing Chinese and Asian population, rule of law and education.
Q3 in 2020 saw the biggest number of Investor visas issued for the year, with 96. Although this was an increase compared to Q3 in 2019 with 49 issued, 2020 overall did see a decline. For the year as a whole, the Home Office approved 216 main applicants, down from 360 in 2019. For Q4 of 2020, Hong Kong was the largest source of investors which contributed 10 of the 52 applicants, followed by China (9), the United States (6) and Russia (5).
As the vaccine rollout here in the UK resonates with foreign investors and those wishing to move, the UK will be looking for a comeback. Healthcare, education and political stability looking to be the main reasons to move, according to Shard Capital. Talk to us to find out more about starting your Tier 1 Investor Visa journey.