Chinese buyers, who had previously left the market to wealthy Russians and Indians, suddenly decided they wanted an apartment in London too.
"I think they have suddenly realized the yields (annual rental income over property value) of 3 to 5 percent in central London are better than they can obtain in Hong Kong, where they are typically between 1 and 2 percent," added Moss.
He said Chinese and other Asian buyers are in a much better position than domestic UK buyers because their banks are cash rich and prepared to lend money whereas UK and other Western banks are refusing to lend, even to people with perfect credit histories.
"The banks here aren't lending, whereas Chinese buyers are not just getting the funds but better interest rates than can be obtained in the UK as well as higher loan-to-value mortgages. A lot of the mortgages we see now are from Hong Kong or come from offshore," he said.
Moss, who started the company, previously called Homesearch, in 1996 charges a 2 percent fee for his services if he successfully finds a client a property.
He said he has around six clients from Asia, including Hong Kong, which is where Chinese mainland investors tend to channel funds to buy property.
"They don't come through the mainland but through Hong Kong. Like other Asian investors from countries such as Malaysia and Thailand, they are looking for safe havens to put their money and London property essentially provides that," he said.
Moss said the Chinese property buying behavior is like that of most international property investors.
"They are either looking to rent the properties out or they are what I call an 'esoteric' investor. These are people who want to buy good quality properties and will use them as a London base for their family or children when they go to university. They will probably hold them in some family trust or offshore investment vehicle for 15 to 25 years," he said.
Moss said investing in London property had proved to be a good investment with property prices in central London growing by 9 percent a year since 1985, according to Land Registry data in the UK.
"If someone puts down a 30 percent deposit and borrows the remainder, paying a 3.5 percent interest rate, they have been able to achieve a 50 percent return on equity in five years and 100 percent over eight years," added Moss.
The surveyor added Chinese investors needed to be aware of the hype surrounding some schemes.
He recalled doing property presentations to potential investors in Hong Kong in the mid-1990s.
"During one of these I remember picking up a copy of the South China Morning Post in my hotel room and looking at the property pages. There was an advert for a scheme showing pictures of Buckingham Palace and the Houses of Parliament. The properties were in fringe Maida Vale, however, which is nowhere near either. They were also terrible. The same sales tactics are being used now," he said.
Moss said the Chinese were not always looking for investment but were also being lured in by the lifestyle that London can offer.
"It is a very cosmopolitan city and the quality of what happens in London in terms of the culture and lifestyle is what appeals to people. London is on a bit of roll right now," he said.
(Source: China Daily)
Related:
Chinese settle on London as prime location
BEIJING, August 9 (Xinhuanet) -- Walking around some of London's affluent retail areas such as Bond Street and Knightsbridge, the intonations of Putonghua are never far out of hearing.
Expensively dressed Chinese people are there to shop for the expensive items they now see as their right.
But it is no longer just Luis Vuitton handbags or diamond jewelry they are buying. China's new rich now want to splash out millions to buy property in one of the most expensive cities in the world. Full story
