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Wealthy Chinese looking to invest more in London prime property
Chinese investors, particularly those from the mainland are set to become the biggest group of investors in London with a relaxation of the amount of money that can be moved overseas due to be implemented soon, it is claimed. The changes in the stock market may also play a key role as wealthy Chinese investors turn away from their domestic market to explore new investment opportunities overseas, says upmarket estate agent Harrods Estates. Typically Chinese spend up to £2 million on a new off plan development in London, however the firm believes this will change with buyers from China looking at investing from £2 million to £50 million in real estate. ‘There is a huge amount of wealth in China and although we have started to see investment in London property in the last five years, the focus has been on off plan new build developments ranging from £500,000 to £5 million,’ said Simon Barry, head of new residential developments at Harrods Estates. ‘This is just the beginning of a vast amount of wealth from China and we expect this will increase dramatically over the coming years, when Chinese billionaires will look to spend anything from £5 million to £50 million,’ he added. Over the past two decades, wealth generated by China’s rate of economic expansion has flowed into Hong Kong and Singapore through corporate investment, much of which has fuelled the demand for London property. Harrods Estates has seen investors from Beijing, Shanghai, Hong Kong and Singapore, with mainland China still untapped due to an initial focus on the domestic property markets. This is now set to change as a handful of developers and estate agents explore the opportunity to reach out to mainland China, where there has not been direct to overseas property markets. ‘We expect to see more high level Chinese executives finding time to travel to London and other international centres, seeking out new markets and new opportunities outside of China,’ said Barry. He pointed out that at present there are capital controls in place restricting potential Chinese purchasers taking out US$50,000 per year, however a revised version of the Qualified Domestic Individual Investor programme (QQII 2) has recently been announced although it has yet to be implemented. ‘The programme will be open initially to anyone working in six major cities with assets in excess of circa US$160,000, and will allow them to export up to 50% by value of their net worth. For corporate investment the capital limit would rise significantly to US$1 Billion,’ he explained. He believes that China’s slowing economy and its recent stock market crash, which saw the Shanghai Composite Index lose 30% in value over a three week period in the middle of June and a further plummet in value in late July, will actually encourage investors to look at other opportunities. According to the firm one of the primary motivators for Chinese… Continue reading
UK landlords advised not to be swayed by misinterpretation of legionella testing
Some consultants and letting agents in the UK are misinterpreting landlord’s responsibilities regarding legionella risks to their tenants, it is claimed. According to the Health and Safety Executive (HSE) they are using the revised L8 ACOP to suggest that new legislation has been imposed on landlords of domestic rented properties in relation to assessing and controlling the risks of exposure to Legionella bacteria of their tenants. ‘This is wrong, the legislation has not been changed and any misinterpretation or misunderstanding can impose unnecessary financial burdens on landlords where they are being charged for legionella testing and certificates they don’t actually need,’ said a HSE spokesman. He pointed out that whilst there is a legal duty for landlords to assess and control the risk of exposure to legionella bacteria, Health and Safety law does not require landlords to produce a Legionnaires testing certificate. ‘Legionella testing or sampling is generally not required in domestic hot and cold water systems and then only in exceptional circumstances,’ the spokesman pointed out. ‘Misinterpretation of the legal requirements by some consultants and letting agents about landlords responsibilities to manage and control legionella in domestic premises may result in unnecessary financial burdens being placed on landlords and tenants,’ he added. The HSE has produced free practical guidance for landlords available to on its website on how to manage and control the risks in your system. The spokesman said that following the guidance is not compulsory and landlords are free to take other action, but if they do follow the guidance they will normally be doing enough to comply with the law. The guidance says that simple control measures can help control the risk of exposure to legionella such as flushing out the system prior to letting the property and avoiding debris getting into the system by making sure that cold water tanks, where fitted, have a tight fitting lid. It also says that tenants should be advised of any control measures put in place that should be maintained, for example not to adjust the temperature setting of the calorifier, to regularly clean showerheads and to inform the landlord if the hot water is not heating properly or there are any other problems with the system so that appropriate action can be taken. When it comes to showers in most domestic settings the risks are reduced by regular use but in any case, tenants should be advised to regularly clean and disinfect showerheads. Instant electric showers pose less of a risk as they are generally cold water fed and heat only small volumes of water during operation. The guidance points out that it is important that water is not allowed to stagnate within the water system and so there should be careful management of dwellings that are vacant for extended periods such as student accommodation left empty over the summer. As a general principle, outlets on hot and cold water systems should be used at least once a week to maintain a… Continue reading
Lending from Building Societies for home buying in UK holds steady
Building societies in the UK approved 189,700 mortgages in the first half of 2015, accounting for 29% of the total market, the latest data shows. They also lent £26.4 billion of gross new mortgages, according to the monthly figures from the Building Societies Association (BSA). Net lending, that is gross lending minus repayments, was £6.5 billion during this period, accounting for a 57% share of the market. A breakdown of the figures also shows that gross lending was £26.4 billion or 27% of the market, while mortgage balances was £257.7 billion or 20% of the market. ‘This data again demonstrates the key contribution that building societies’ are making to the UK mortgage market,’ said Paul Broadhead, head of mortgage policy at the BSA. ‘Mortgage approvals are up, mortgages balances remain steady and building societies accounted for over half of net lending in the first half of the year, against a natural market share of 20%,’ he explained. ‘Whilst our support to first time buyers and aspiring home owners remains strong, the building society sector continues to service the whole spectrum of borrowers, including people requiring a mortgage that lasts into retirement,’ he pointed out. ‘The sector continues to provide innovative products helping to encourage diversity and ensure a wide range of borrowers’ needs are served,’ he added. Continue reading
