London real estate 2025: Chinese retreat, Americans advance

For more China-focused finance coverage, subscribe to the Jing Finance newsletter for the latest news, business updates, global analysis, and trends shaping financial markets. The Chinese are not as gung-ho about London property as they used to be. Completions have fallen in recent years, and this is especially true for super-prime properties at over 10 million British pounds ($13.25 million). However, geopolitical factors are creating a push-pull phenomenon, which will keep the British capital in play for Chinese buyers. According to BuyAssociation, which specializes in bringing together investors and property developers for early-stage access to new projects, Americans have overtaken Chinese buyers in the latest figures for London, fueled by an anti-Trump effect. Research from real estate agency Knight Frank reveals that U.S. investors accounted for 11.6% of overseas buyers in Prime Central London (PCL) in Q4 2024, nudging out Chinese buyers whose share fell to 8.1%. Moreover, a comparison of 2024 with 2023 shows that only Chinese buyers declined among the top six foreign nationalities. Structural issues still exist in China’s property market, with Evergrande’s collapse still reverberating. “The prevailing economic uncertainty has led many Chinese buyers to adopt a more conservative approach. It has also compelled them to explore other markets, mainly in Asia-Pacific,” Christine Li, head of research, Asia-Pacific at Knight Frank, tells Jing Daily. “In 2024, Chinese mainland buyers were especially active in Thailand and Australia, as well as Tokyo, where low borrowing costs and the weak Japanese yen fueled buying interest for new apartments in inner city locations.” Nevertheless, London transactions spiked in March before new stamp duty rules came in on April 1, affecting investment property buyers in particular. Since April 2021, non-U.K. residents are required to pay an additional 2% on top of the standard stamp duty rates in England. Top-end on indefinite hold According to data provider LonRes, March transactions for prime properties were up 30% YoY, with new instructions 20.3% higher in the first quarter. However, while sales rose 12.4% in Q1, sales of properties costing more than 5 million British pounds ($6.63 million) declined 13%. Since the 2008 financial crisis and Brexit vote in 2016, a generally weaker pound versus dollar-pegged currencies, such as those of Hong Kong and Singapore, has given investors from these locations more buying power in the U.K. Hong Kong investors are estimated to hold around 13.2% of all foreign-owned housing in the U.K., according to BuyAssociation, and this has accelerated since British National (Overseas) visa rules came into play in 2021. Now, these same investors will hold tight for the right conditions. Inevitably this means swingeing cuts in asking prices. In January, Beauchamp Estates sold The Holme, a mansion in Regent’s Park, for 139 million British pounds ($184.5 million) which was 111 millionBritish pounds ($147 million) below the asking price. This makes it the second most expensive residential sale in the U.K. after 2-8 Rutland Gate, which sold for a record 210 million British pounds ($279 million) in 2020 to Evergrande’s founder, according to the Financial Times. From buyers to renters: The new Chinese strategy in London Steven Baldwin from property PR and comms group Lawrie Cornish, says: “For trophy homes, those that are 10 million British pounds ($13.25 million) and up, the market is incredibly slow because it (now) takes a long time to recover the cost of purchase. If you’re buying a property that is 10 million British pounds-plus and the stamp duty (and other costs) is 1 million British pounds, you can rent something pretty spectacular for half of that amount per year. We have seen an increase in super-prime rentals even though super-prime sales have fallen.” While Central London has lost some pulling power at the top end, the Chinese in this category can afford to wait it out and enjoy the flexibility of renting before making a purchase. “For Chinese buyers, when you get above $10 million, it is not needs based, but aspirational or something else, so they can take it or leave it,” Paul Finch from Beauchamp Estates tells Jing Daily. “But, remember too, that the Chinese have always favoured London to somewhere like the Middle East despite the outflow of money there. The culture and the education system here is really important to them and there is, of course, a huge Chinese expat community here.” Outer London’s Chinese boom: Following the education trail Moving down the ladder to the so-called investor market, Chinese buyers want something that is “turn-key, brand new,” says Finch. “That five-year, off-plan investment play has come off the boil a bit more. These are the middle classes who may be clubbing together with family and friends and they’ve been more impacted at home than the very wealthy,” he adds. For those buying as an investment, or to put their kids through one of the several prestigious universities in London, locations that are further out, but that have relevant amenities like shops, parks and fast transport to the center, are gaining attention. One of them is Brent Cross Town, a large North London development 12 minutes from St. Pancras International station with its direct train connections to Paris and Amsterdam. The developer, Related Argent is behind the lauded regeneration of London’s King’s Cross and New York’s Hudson Yards, the largest private real estate development in the history of the U.S. This gives the Brent Cross development and its 6,700 homes added weight in a very competitive new-build sector where the sales rates “have slowed quite a bit,” says Finch. But further out, China-specialist communications group 11K Consulting, has seen an increase in Chinese buyers and investors acquiring both new-build and second-hand properties, “particularly those from Hong Kong who have decided to relocate to the U.K. over the past few years.” These parts of London are more affordable and often with good schools nearby, the company says. Geopolitics casts long shadow Trump’s tariffs targeting China are also expected to prompt Chinese buyers to switch focus from the U.S. to the U.K., if only from a national pride standpoint. “There will probably be some switching but it will take time to play out, maybe by Q3 if the tariffs do start hitting home,” says Finch. “Increasing uncertainties in China-U.S. relations have caused buyers from the Chinese mainland to reconsider relocation or investment destinations,” Knight Frank’s Li says. “The number of Chinese mainland students opting for a place in U.S. universities has fallen since the pandemic. With the Bank of England widely expected to ease interest rates for most of 2025, interest in London properties from Chinese buyers can be expected to grow.”

Has London property lost its luster for wealthy Chinese?

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Has London property lost its luster for wealthy Chinese?