Jump to content
House Price Crash Forum
Sign in to follow this  
Guest

If All The Foreign Owners In London...

Recommended Posts

Guest

...started to sell... what would happen to the GBP exhange rate?

If the Chinese (for example) owners of London property all decide they want to sell in a hurry, apart from dropping house prices, what does that do to the GBP to Chinese Yuan exchange rate? In my mind there would be less demand for GBP because they sell the house, and convert their GBP back to Yuan.... which would lead to further weakening of the GBP?

Share this post


Link to post
Share on other sites

...started to sell... what would happen to the GBP exhange rate?

If the Chinese (for example) owners of London property all decide they want to sell in a hurry, apart from dropping house prices, what does that do to the GBP to Chinese Yuan exchange rate? In my mind there would be less demand for GBP because they sell the house, and convert their GBP back to Yuan.... which would lead to further weakening of the GBP?

I thought you were going to say...we're laid end to end they would stretch from London back to where they came from.

Share this post


Link to post
Share on other sites
Guest

I thought you were going to say...we're laid end to end they would stretch from London back to where they came from.

:)

Share this post


Link to post
Share on other sites

I believe sales have slowed dramatically as £ has recently strengthened.

There will be sellers when there is China, €zone collapse. They will sell to buy incredibly cheaply at home - businesses and commercial properties

Share this post


Link to post
Share on other sites

I think the "casino money" sloshing about in london will expedite the crash here... the gamblers are a fickle lot unlike the typical "home owner / amateur BTLer" who psychologically would try and "sit out" a slump.

Share this post


Link to post
Share on other sites

I believe sales have slowed dramatically as £ has recently strengthened.

There will be sellers when there is China, €zone collapse. They will sell to buy incredibly cheaply at home - businesses and commercial properties

You also have to note that China has a rule that people can only buy two properties, this is why you'll find a lot of rich Chinese investing in properties overseas.

Share this post


Link to post
Share on other sites

If they all decided to sell at once? The effect would be zero.

First, they either need to find a bigger fool, or at least an equal fool. Assuming both prospects are impossible, they need to sell at a loss. Even then, given that they've pumped up the market so far, they would have to sell at a considerable loss.

So, assuming they all decide to take a massive hit........ some other foreigner will buy up the property. The impact on the market and on UK capital outflows/inflows would be zero.That's even if they decided to repatriate the proceeds back to China etc. which they wouldn't because problems at home is the reason why they are buying. So probably there would be a net capital inflow to UK.

Or else................. they all get bought by UK peeps. Big places get converted to BTL multiple occupancy. Small places bought by Joe Public, which drives down the housing market a litle, but it then gets all frothy, driven by "cheap" property.

Net result - London remains the property market for fools and people with more money than sense.

.

Share this post


Link to post
Share on other sites

I believe that a major part of the problem is that EVERY Chinese CASH buyer is buying with illegally laundered money.

How do I come to this conclusion? Well I was reading about the USD / RMB currency peg and something that struck me is that you cannot just go anywhere in China, take a big bunch of RMB and change it for dollars. You have to go to the Bank Of China and there are limits set, you have to show photo ID.

The money parked in London property is like that of Apple ang Google parked off shore so they don't have to pay tax repatriating it.

There is no legal private money-changing in mainland China. It all has to be done through BOC within china, with maximum limits of $50,000 USD per year

http://www.china-briefing.com/news/2011/11/11/getting-cash-money-rmb-out-of-china.html

An issue that frequently crops up at this time of year is the question of getting earned income out of China. As many expatriates look to leave to go home for Christmas, those piles of RMB that have been stacking up nicely begin to look mouth-watering in terms of repatriating the readies. But here comes a catch – for expatriates legitimately employed in China, and paying tax here, there is not a problem. But for those working in China’s grey economy – there is. Let me explain.

China employs strict currency regulations that are designed to prevent large amounts of currency moving out of the country. Your small amount may not seem like a huge deal, but if everyone moved out a few thousand dollars, it would impact upon China’s economy. The movement of illicit cash both into and out of China is known as “hot money” and it can seriously damage a country’s financial stability if not regulated. China controls and monitors the amounts of money coming into and out of the country through a mechanism known as SAFE – The State Administration of Foreign Exchange. In order to legitimately take money out of China (typically wire transfer), an application needs to be made to SAFE (your bank would normally assist with this procedure) with proof of income taxes paid in China, and details of the overseas bank account the funds are to be wired to. The onus is on the applicant therefore to demonstrate the money was legitimately earned and taxes have been paid on it. If so, the money is permitted to be repatriated and there is no daily or annual ceiling limiting the amount an individual can transfer. This should not be a problem for expatriates in China with proper working contracts, visas and tax registrations.

However, many expats in China fall into a different category. Either by design or default (Chinese employers sometimes take advantage and do not fully explain this issue), there are expatriates in China who are not properly registered with the authorities, are not paying taxes, and who have nonetheless acquired a bundle of RMB. Here, there is a problem. Firstly, such individuals cannot meet the SAFE requirements, and this becomes a block. Chinese banks will not allow you to exchange and wire overseas any amount over the RMB equivalent of US$500 for you without SAFE approval, and if there is no tax paid receipts (employers should provide this) or no work permit or visa, this route is barred.

It should be noted, though, that foreign nationals can transfer any amount under or equal to the equivalent of US$500 once per day without providing proof that the money was legitimately earned or that taxes have been paid on it. Chinese nationals are able to transfer the equivalent of US$2,000 per day into a foreign bank account, however Chinese nationals face a US$50,000 annual ceiling when exchanging RMB into foreign currencies while foreign nationals do not face such restrictions.

- See more at: http://www.china-briefing.com/news/2011/11/11/getting-cash-money-rmb-out-of-china.html#sthash.z2ukAMj9.dpuf

Now tell me this, how does a chineese citizen LEGALLY get their hands on a couple of million £££ to buy prime London property? They don't they sell goods in USD, GBP then illegally embesil the money into London [and other worldwide prime] property hoping to one day either to move out of China or hope that China de-peggs from the USD so they can sell their 'investment' and take the money back to China untaxed.

In my view, over the last couple of years China has been stacking commodities and arranging swaps with various countries in an attempt to de-throne the dollar and make the RMB globally acceptable. If they are successful then IMO Chinese property owners are likely to cash in their portfolios and spend their money back in China.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   217 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.