Case Study – How a Young Hong Kong Couple Experienced "Buyer's Remorse" due to the Stamp Duty Holiday

2 Aug 2021


Andy Wang and Jessica Chan are a Hong Kong couple in their early 30’s. Married five years ago, they now have two children, aged 3 years and 18 months. Andy is a successful IT engineer and Jessica a nurse with a combined annual income of HKD1.1m.


Looking to the future, they made the decision in early 2020 to migrate to the UK and buy a property in London. They will lease out the 2-bedroom flat they are buying in Sha Tin. Andy is excited by the job opportunities in the London IT market and Jessica wants a safe environment in which to raise their children. They have friends who live in South Croydon, in the London borough of Croydon, so they focused their property search there.


They commenced their property search in February 2020 but haven’t been able to travel to London because of COVID related restrictions. They have been relying upon a combination of online searches, marketing from local estate agents and asking their friends to conduct viewings. After much searching, and worried that they would miss out on the government’s stamp duty holiday, they purchased a 2-bedroom flat in South Croydon for £300,000 in March 2021.


Their sale didn’t complete before the 30 June deadline to take advantage of the full tax savings, so the maximum benefit they will receive is £2,500.  In the 12 months that they spent on the property search prices in Croydon increased by 10%, meaning that if they had purchased 12 months earlier, they could have saved up to £30,000. Obviously, this dwarfs the £2,500 benefit they gained from the stamp duty holiday.


What went Wrong?

  1. Andy has only travelled to London once before, on holiday. Jessica has never been there. So, they have very little familiarity with the city and its different precincts.
  2. Their decision on where to purchase was heavily influenced by the desire to live close to their friends. They spent very little time assessing important criteria such as proximity to employment, local schools and neighbourhood security. Or the capital growth prospects of the area they bought into.
  3. They made the decision to retain their property in Hong Kong believing that they should keep their options open and that the rental income could prove beneficial whilst they secure employment. Unfortunately, they failed to do any research on the taxation implications given that they will be UK tax residents. This will prove very costly.
  4. Electing to retain their Hong Kong property has also deprived them of additional capital to commit to their London property purchase. Whilst the 2-Bedroom flat is adequate for their needs today, in the next 2-3 years they will require another bedroom. At that point, they will again have to commit to buying and selling.
  5. Having committed to this purchase just as COVID-19 was impacting, the early months of their property search were low key. With the announcement of the UK government’s stamp duty holiday, their search intensified. But Andy lacked confidence in the recommendations being provided by local estate agents and he knew that his friends were well-meaning but ill-equipped to do the job required.
  6. Finally, Andy and Jessica committed to the purchase because they were worried that they were missing out on a fast-rising market and the stamp duty savings on offer. They were also mentally and emotionally exhausted from spending 12 months searching for the right property. In short, they panicked.


In summary, they failed to do their homework concerning:

  • Physical property requirements
  • Best location to meet their lifestyle and professional needs
  • Taxation implications

On the biggest financial decision in their married life together, they relied upon advice from estate agents representing home sellers and well-meaning but unqualified friends. Finally, they made a hasty purchase decision based upon the fear of missing out. Sadly, they are destined to experience buyer's remorse.


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