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Why Hong Kong buyers are snapping up properties in Kent towns like Tunbridge Wells

If you thought house prices in Kent were steep, just consider yourself lucky you don't live in Hong Kong.

In what has become the most expensive property market in the world, those living in the special administrative region of China are looking at an average house price weighing in at around £940,000. And, it should be said, they tend to be pretty small.

Hong Kong is one of the world's financial centres - which has seen property prices soar to the most expensive in the world
Hong Kong is one of the world's financial centres - which has seen property prices soar to the most expensive in the world

Compare that to Kent's average property price which, according to the Land Registry, last year stood at just over £365,600.

And rental prices aren't much better. According to property experts CBRE, the average monthly rental cost for Hong Kongers in 2020 was more than £2,000. London's in comparison, stood at £1,400. In Kent it's a slightly more palatable £830.

Little wonder, then, that many in Hong Kong are looking to make the move; and one town in Kent - almost 6,000 miles away - is proving particularly popular.

On one new-build development in Tunbridge Wells in October, 22 buyers hailed from Hong Kong (HK). The prices weren't cheap either, with homes costing from £625,000. It equated to a remarkable 80% of housebuilder Dandara's sales during the period.

And there is no sign of the trend slowing with interest already being expressed in other developments elsewhere in the county.

Aerial view of the Knights Wood development in Tunbridge Wells which has proved a hit with buyers from Hong Kong. Picture: Dandara
Aerial view of the Knights Wood development in Tunbridge Wells which has proved a hit with buyers from Hong Kong. Picture: Dandara

Private buyers are flocking to snap up properties in predominantly affluent towns in the Home Counties - one the preserve of deep-pocketed investors.

"UK properties has always been popular among HK buyers for investment purposes," explains Fanny Chan, head of UK for Hong Kong property agency Raeon International, a firm which sources properties in the UK to sell to those living in the city.

"But I've never seen such a strong demand for UK houses from HK buyers. Right now, it's probably the strongest demand we've seen."

So significant has the surge been she had relocated to the UK from the region just two days before we speak to head up its new office here.

The majority - in carefully selected areas - are being purchased before they are even built and buyers are buying primarily after viewing video and marketing details without even visiting the county.

The properties being snapped up are in the mid to high-end of the market
The properties being snapped up are in the mid to high-end of the market

So why are we seeing this happen?

First, a very quick (I promise) history lesson. Up until 1997, Hong Kong had been under British rule for 156 years. But when an agreed 99-year lease, signed in 1898, reached a conclusion, it was agreed it would be handed over to its neighbour China.

However, a condition of the change in Hong Kong's sovereignty was that its economic and political systems would be kept separate to that governed by Beijing - under what is known as the 'one country, two systems' model. And that was guaranteed for 50 years.

Plenty of those living in the city in the run-up to the handover were not convinced, and it is estimated between 1984 and 1997 some one million people emigrated; many heading to the UK.

But in the last two years, amid moves by China to exert what is perceived as more control over the city, there have been protests and a pro-democracy uprising; the pinnacle of which saw trouble spill onto the streets. Hong Kongers were particularly opposed to the introduction of a new security law which it saw as reducing the city's autonomy.

It is thought up to one million people will take advantage of the visa scheme to leave Hong Kong and move to the UK
It is thought up to one million people will take advantage of the visa scheme to leave Hong Kong and move to the UK

In the light of the unrest, the UK government revealed last year it was introducing a visa scheme to allow British nationals - and their dependants - to move to the UK for up to five years, at which point they can apply for permanent residency. The visas were opened in March.

Up to one million are expected to take advantage of the offer.

And, of course, if they're moving here, they need a home. And Kent, it seems, is one of those at the top of their list.

Adds Raeon's Fanny Chan: "I think Tunbridge Wells ticks a few boxes that HK buyers are looking for in a long term home. Usually they would look for a safe area, normally a more affluent area and with easy transportation back and forth from London.

"The major reason for Tunbridge Wells is the school network. Over 90% are good or outstanding schools [according to Ofsted] which are very attractive to families. One of the reasons they buy before they go is that they want an address first. So they can apply for the local schools.

Tunbridge Wells is one of the affluent towns in the Home Counties proving such a draw
Tunbridge Wells is one of the affluent towns in the Home Counties proving such a draw

"A few other areas are of a similar nature and we're seeing interest in the likes of St Albans, Reading, Epsom."

In short, these are not cash-rich buyers snapping up properties on the lower rung of the property market - they are entering straight in the mid to high price range.

"It used to be a lot of investors from HK would buy UK properties," she adds, "but since the visa has launched most are looking at a long-term home for the whole family.

"Demand has switched so now 60-70% are now looking for self-use properties - the rest are looking for investments."

Professor Mee Kam Ng is director of the Urban Studies Programme at the Chinese University of Hong Kong.

"​I think the visa scheme is the pull factor," she explains. "The push factor is the changing political context, the implementation of the national security law and so on.

"​The property market here in Hong Kong has been crazy. In the old Kai Tak airport area, which is now under redevelopment, a small flat of about 30sq m has an asking for a price of HK$8 million (£800,000). I hope it's going down but the market is supported by buyers who can afford to pay.

"As property prices are much lower in the UK when compared to HK, people could sell and cash in their apartment and emigrate there."

And the maths on such a sale allows them to come to Kent with the ability to support themselves.

Fanny Chan adds: "A lot of people who sell their HK property tend to cut their funds in half - half to buy the home, half for expenses as they do not expect to have a job straight away, so will need to support their family for at least a year.

Cashing in on a property in Hong Kong allows buyers to emigrate - with enough money to support their families until they have secured jobs
Cashing in on a property in Hong Kong allows buyers to emigrate - with enough money to support their families until they have secured jobs

"I'm expecting to see the trend continue for at least one to two years because there are still families planning to leave in the coming 12-18 months and they are constantly looking for properties."

Louise Norman is the associate sales and marketing director for Dandara South East - the developer behind the Knights Wood site in Tunbridge Wells which has seen such a flurry of sales from Hong Kong.

Raeon had approached her after identifying the town, and the development, as likely to appeal to buyers from Hong Kong.

She explains: "Their customers are looking to move in a year's time. They didn't want anything that was ready now. So they're planning their futures and taking into consideration schooling, because education is very important to them.

"They were looking at Tunbridge Wells specifically and we had properties at the right stage of build for their customers, so it was a marriage made in heaven really.

Louise Norman, associate sales and marketing director for Dandara South East
Louise Norman, associate sales and marketing director for Dandara South East

"They held a couple of exhibitions and introduced their clients to this block of properties we gave them exclusivity on. That proved hugely successful.

"We've since had other agents approach me who also interested more broadly in Kent and not just Tunbridge Wells.

"We've a development in East Malling which we're going to the market with in the new year, so they've expressed interest in that site.

"It's interesting, because we had the 1887 apartments near the Pantiles in Tunbridge Wells recently but that was something they were less interested in. One, because it was leasehold and they are apartments, and two because they are ready now."

So are they looking to stay in the county or are the purchases with an eye to the expected property value growth?

More than 20 properties on this development have been reserved by buyers from Hong Kong. Picture: Dandara
More than 20 properties on this development have been reserved by buyers from Hong Kong. Picture: Dandara

Adds Louise Norman: "I don't think they're looking at selling them in 18 months. They're looking to settle. Education is really important to them and finding the right school and getting their child established is important to them.

"They are also concerned about who their neighbours will be. So I think they're looking to build a community and integrate into the community. Which says to me they're looking to put their roots down there.

"It adds to the diversity of the development and that's something we want to encourage."

A growing number of Hong Kong communities in the UK are springing up on social media; offering support and advice from those already in situ to those planning the move across the world.

But then Kent has long been a place of interest for investors from Hong Kong.

Agencies work with developers to market their properties overseas
Agencies work with developers to market their properties overseas

It may seem strange to think that prices which seem out of reach to many buyers here prove to be chump change for the wealthy overseas.

Spencer Fortag, a property expert who runs Dockside Property Services in Medway, has long experience of the attraction of the county to those in Hong Kong.

"When we were a selling agent for The Quays in Chatham Maritime we took that project to Hong Kong and Singapore about eight years ago.

"This was when the Asian market - Hong Kong and China - was very much focused on central London; prime postcodes, all the traditional super popular areas, but we still sold 25 apartments on our first weekend launch over there.

"The buyers there are super-savy and they're always looking at areas where there's good growth on a capital basis and on rental income.

Dockside Property Services' Spencer Fortag has experience of selling to Hong Kong buyers
Dockside Property Services' Spencer Fortag has experience of selling to Hong Kong buyers

"HK is ridiculously expensive and generally the apartments are very, very small. When the HK investors look at Medway and see you can buy a pretty spacious, brand new, two-bedroom apartment for £250,000 or freehold new build four-bed house for £500,000 comparatively it's very cheap compared to the domestic market.

"Coming back to our launch a few years ago of The Quays - the reason we did so well there was that people were coming to our event in the hotel and purely buying speculatively because back then the one-bedrooms were about £150,000. They didn't really know about the area, or what they were buying, but for them it was a low value purchase; a speculative punt which they felt comfortable with given the low values."

Hong Kong will remain one of the world's most in-demand areas. Its roots as a business hub and major financial centre will ensure its prosperity and property prices will remain high as a result.

So what is the feeling among those remaining in Hong Kong as they see so many apply to leave?

"​It is sad to see people leaving," says Professor Mee Kam Ng, "but in Hong Kong, people come and go - it's in our DNA. It's what makes Hong Kong special."

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