Chinese and Hong Kong investors dominate international demand for brand new homes in London. According to Knight Frank, they account for 25 per cent of sales of prime central London new build homes. Less well-known is their interest in older properties which can produce a higher return than new build, because value can be added to them and they are relatively less expensive to buy.
In particular, Chinese businessmen want multi-million pound period homes, the biggest profit-makers. Following several years of heady growth, prices in prime central London districts like Mayfair, are 14 per cent higher than at their pre-credit crunch peak of March 2008. This growth far outstrips the rest of the British housing market.
The arrival of Chinese investors is helping generate business for central London's growing number of high-end designers and builders, like Oliver Burns and Finchatton. Refurbishment specialist Eaton Gate has helped a dozen Chinese clients refurbish homes.
Eaton Gate says Chinese investors include “entrepreneurs, socialites, art collectors, high level business executives and global corporate chair- persons”. Early Hong Kong clients included Andrew and Patti Wong, who converted a church in Maida Vale in the northwest corner of central London into a home.
With investment potential a priority, these buyers purchase homes close to amenities like parks, restaurants and transport links, and often located around garden squares, because these are among the most sought-after locations in the British capital. They then refurbish these homes to suit their needs and add value.
For example, in Cadogan Square, Chelsea, a Chinese investor has turned a three bedroom duplex into a one bedroom home with plenty of space for displaying their artwork. Having spent £6 million (HK$74.8 million) on buying the 285 square meter home and £3 million refurbishing it, the property is now worth £12 million says Eaton Gate, that is a mark up of 33 per cent.
