Chinese buyers cash in on weak pound in Manchester
The city of Manchester in the North West of England is proving to be a property investment hotspot for Chinese buyers after the weakness of the pound on the international currency markets meant prices became hugely favorable for overseas investors over domestic buyers.
A document produced by the local authority said before it had even happened, the prospect of Brexit was taking an economic toll on Manchester’s building industry, and picked out Japan and China as two countries whose investors were benefitting as a result.
“Evidence suggests that buyers from China and Japan saved 16 percent and 27 percent respectively on the purchase price of a city center apartment compared to domestic investors buying in sterling,” it said.
“As a result, overseas investors have been able to carry the additional costs associated with the 3 percent stamp duty land tax levied on purchases for second homes.”
The increasing cost of imported materials, which also has an impact on labor costs, is adding to the situation, which is only expected to get worse if Brexit happens, and has already contributed to a 15 percent increase in the cost of building development over the last two years.
Council leader Richard Leese added that future planning was not being made any easier because local authorities had been “for a long period of time starved of information” about Brexit.
“After the deferral of Brexit to Oct 31,” he said, “basically civil servants effectively put down their pens on planning for a very long period of time and it’s only really in the last few weeks that we have started to see urgency from government in terms of dealing with the likely consequences.”
Manchester has the second-largest Chinatown in the United Kingdom, with a history dating back to the early part of the 20th century. Historically, the city was a key player in the Industrial Revolution and home to much of Britain’s manufacturing industry, and in the modern era it is famed around the world for its music scene and two hugely successful soccer teams, bitter rivals Manchester City and Manchester United.
Manchester is also home to several universities, with the University of Manchester having around 5,000 Chinese undergraduate students, and in 2017, it received donation of 5 million pounds ($6.16 million) from Hong Kong businessman Lee Kai Hung to establish a Chinese institute and Chinese culture gallery at the Manchester Museum. China’s minister of science and technology, Wang Zhigang visited the university this summer to see the work of the new institute in action.
Following President Xi Jinping’s highly publicized visit to the city in 2015, direct flights between Manchester and Beijing were introduced in 2016, and since then it has been an increasingly popular destination for Chinese visitors, something the city has deliberately encouraged.
Manchester Airport is the third-largest in Great Britain and in October 2018 it appointed a Mandarin-speaking marketing manager to work specifically on its Chinese social media and assist with Hainan Airlines’ operations at the airport.
These efforts contributed to the airport winning a gold award at this year’s Chinese Tourist Welcome Awards, organized by the China Outbound Tourism Research Institute, in recognition of the specific effort it has put into welcoming Chinese travelers.