{"id":1492,"date":"2020-12-09T07:59:49","date_gmt":"2020-12-09T07:59:49","guid":{"rendered":"https:\/\/bricksandmortarmgt.com\/?p=1492"},"modified":"2021-02-04T04:59:33","modified_gmt":"2021-02-04T04:59:33","slug":"bno-to-boost-uk-property-but-which-area-benefits-most-20200905","status":"publish","type":"post","link":"https:\/\/bricksandmortarmgt.com\/zh_hk\/2020\/12\/bno-to-boost-uk-property-but-which-area-benefits-most-20200905\/","title":{"rendered":"BNO to boost UK property, but which area benefits most? 20200905"},"content":{"rendered":"

BNO to boost UK property, but which area benefits most?<\/strong><\/p>\n\n\n\n

Since the imposition of the new national security law on HK from July, immigration enquiries have surged (Chart 1), while at the same time a number of foreign nations have also offered eased passage for Hongkongers to either emigrate to, or seek refuge in (see Table 1).<\/p>\n\n\n\n

Chart 1: Google search of \u2018emigration\u2019 steadily rose since 2003, surging with 2014\/19 protests, then hit record high with national security law<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Table 1: immigration schemes announced by various Western countries targeting HKers<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

In this issue, we take a more granular look at how Hongkongers may impact the property market when they resettle in England (more complete data than Scotland\/Wales\/NI!), and from there the possible marginal impact this will have on prices.<\/p>\n\n\n\n

If HKers distribute as current British Chinese in England<\/strong><\/p>\n\n\n\n

There are many ways to estimate where HKers will set up their new homes in the UK, for example, by income strata (but there is no easy way to get this data for BNO passport holders), or simply by how native ethnic Chinese are already distributed in the country (where census data is readily available).<\/p>\n\n\n\n

The latter approach may have a skew towards country living, as more local Chinese may have already integrated into small, even rural communities, which may be harder to do for new arrivals; or there may also be a higher mix of restaurant trade operators across England which raises Chinese numbers in smaller population centres vs big cities which presumably new HKer arrivals would prefer.<\/p>\n\n\n\n

In any case, here are two useful views of how ethnic Chinese (a large proportion would be from Hong Kong) are distributed within England:<\/p>\n\n\n\n

Chart 2: ethnic Chinese as % of total population in county – highest in Inner London<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Chart 3: The biggest cohort of ethnic Chinese also lives in Inner London <\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

We can infer a lot from the above numbers:<\/p>\n\n\n\n

a)       if 10% of the eligible HKers migrate to England, ethnic Chinese will go up by 300k from currently 433k, or a 70% increase;<\/p>\n\n\n\n

b)      racial tension might emerge if all 3m of the eligibles make the move \u2013 as Chinese weighting spike from 0.7% of total now to 1.2% – a big jump indeed;<\/p>\n\n\n\n

c)       assuming the HKers will enter England in the same proportions as ethnic Chinese currently are distributed (Fig 1 below<\/em>) \u2013 which makes sense, as the current pattern already reflects the still largely \u2018Hongkonger preferences\u2019 in living in a Western host society \u2013 then some cities\/counties\/regions will inevitably experience more stress to their systems, from housing demand to infrastructure burden, to service requirements. Let\u2019s now look at the housing side of the picture.<\/p>\n\n\n\n

Figure 1: % pick your destination based on concentration of compatriots!<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

Housing shortage most severe in London, Hampshire, Nottingham?<\/strong><\/p>\n\n\n\n

Upon arrival, the 300k HKers (allocating in same distribution as localised Chinese) will likely go for the existing vacant dwellings first, resulting in undersupply (any dot in Chart 4<\/em> with y axis value over 1) in Hampshire, London, and Nottingham:<\/p>\n\n\n\n

Chart 4: new BNO demand vs existing vacancy \u2013 London, Hampshire, Nottingham most stressed<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

Chart 5: factoring in 2 years of supply, London \/ Nottingham \/ Portsmouth are the most stressed districts<\/em><\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n

The situation is somewhat relieved if we factor in two years of supply likely to reach market (assuming 2019 net completions can be sustained in 2020 and 2021). The result in Chart 5<\/em> follows a similar pattern, with the most overwhelmed districts being London (dots 2 & 3), York (dot 4), Portsmouth (dot 14), Nottingham (dot 7), \u2013 in that order.<\/p>\n\n\n\n

In reality, significantly more than 10% of the eligible HKers may opt to take up the BNO offer, resulting in a maximum 6.7x reading on the demand:supply ratio (instead of 0.67x) for Inner London for example. This could indeed send the hotspot districts\u2019 prices sky high indeed\u2026<\/p>\n\n\n\n

To put all of the above discussions in one concise table, here are all the details of Chart 4 and 5<\/em> laid out for the top 30 popular districts:<\/p>\n\n\n\n

\"\"<\/figure>\n\n\n\n
\"\"<\/figure>\n\n\n\n

Other relief valves for the UK property market?<\/strong><\/p>\n\n\n\n

Whilst the prospect of a tsunami of Hongkongers could seem daunting at first, some other possibility may reduce such pressures \u2013 amongst them are similar migration offers made by other governments (Table 1<\/em> above). There is even the idea of \u2018international charter city<\/strong>\u2019, set up specifically to take larger numbers of HKers \u2013 by locating in a kind of a \u2018Special Administrative Region\u2019 that Hong Kong itself is now \u2013 the new city may even have its own tax regime and regulations.<\/p>\n\n\n\n

It is almost like having a new \u2018One Country, Two Systems\u2019, but instead of being at the southern tip of China, it is moved to somewhere else in the world. For background reading on this concept see here (Chinese, more details)<\/a> and here (English)<\/a>.<\/p>\n\n\n\n

Whatever the outcome, it seems our UK strategy, which benefits from both infrastructure lifts specifically, and Brexit more generally, could see a most unexpected, and perhaps meaningful upward jolt in returns from the HK situation?<\/p>","protected":false},"excerpt":{"rendered":"

…<\/p>\n

BNO to boost UK property, but which area benefits most? 20200905<\/span> Read More \u00bb<\/a><\/p>","protected":false},"author":6,"featured_media":1591,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","content-type":"","_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"site-sidebar-layout":"default","site-content-layout":"default","ast-global-header-display":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"default","adv-header-id-meta":"","stick-header-meta":"default","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","footnotes":""},"categories":[912,918,911,916],"tags":[947,948,944,942,945,946,943],"class_list":["post-1492","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-immigration","category-investment","category-real-estate","category-uk","tag-emigration","tag-england","tag-housing","tag-investment-immigration","tag-uk","tag-uk-property","tag-uk-property-investment"],"jetpack_featured_media_url":"https:\/\/bricksandmortarmgt.com\/wp-content\/uploads\/2020\/12\/210129-lai-family-hong-kong-ew-217p_4f4b26bb4082ef384eb23e08f5c3e187.jpg","_links":{"self":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts\/1492","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/users\/6"}],"replies":[{"embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/comments?post=1492"}],"version-history":[{"count":2,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts\/1492\/revisions"}],"predecessor-version":[{"id":1503,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/posts\/1492\/revisions\/1503"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/media\/1591"}],"wp:attachment":[{"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/media?parent=1492"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/categories?post=1492"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bricksandmortarmgt.com\/zh_hk\/wp-json\/wp\/v2\/tags?post=1492"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}