Brits not deterred by Brexit
According to Tim Swannie, Director of Marseille, France based property brokerage firm Home Hunts, Brits will not be deterred by the weaker pound and Brexit negotiations and will continue to buy properties in France over the course of 2018, thanks to the positive tax reforms and their desire to secure a property before the Brexit deadline.
Buyers are keen to secure properties before Brexit
Home Hunts saw a 100% increase in British enquiries at the end of 2017, many of whom are motivated to buy before March 2019. This has been driven recently by the Brexit ‘divorce’ announcement by the UK and EU negotiators in December, that stated that anyone living in the EU or owning property there will have their citizen rights guaranteed. Since this, there has been a flurry of enquiries from Brits looking to buy in France. We had more than 150 requests in one week from the UK which is unheard of for mid-December.
The falling pound to euro exchange rate has encouraged users to take more flexible mortgages
The interest from Brits was a little up and down in 2017 due to the pound losing value against the Euro since the Brexit referendum. But having sat on the fence for a while, many Brits have just decided ‘enough is enough’ and rather than continuing to wait, they have looked for ways to make things work. One of the most popular solutions has been for British clients to take ‘back-to-back’ mortgages whereby they deposit their money in sterling with a bank. They then borrow the equivalent value in Euros to buy their property and can choose to pay off the mortgage once the pound gains some value, at a time that suits them. Interest rates are low at the moment, so it really makes sense to borrow money for clients of all nationalities.
Macron’s tax reforms will give the market a boost
President Macron has introduced some major tax reforms, that take effect in January 2018, which will give the French property market a boost. Macron is committed to reducing some of the taxes for property owners and simplifying the fiscal framework in France. These include the exemption of the annual taxe d’habitation, which the majority (80%) of households pay, reducing dramatically the wealth tax paid each year and simplifying rental contracts. Many of Home Hunts wealthy clients had previously ruled out the idea of living in France purely because of the idea of paying an annual wealth tax on their worldwide assets, so these changes are good news. It also affects retirees, entrepreneurs, business owners and anyone looking to relocate.
The general optimism that is sweeping France at present will continue to help the property market to grow and we are expecting a very busy year in 2018. This is already proving to be the case with large numbers of visits already booked for January and February including many second and third visits.
Popular areas for Brits are emerging
In terms of the types of homes and areas in France that Brits will be buying in 2018 depends hugely on the individual clients says Home Hunts, but the areas that will remain most popular are the French Riviera, Provence, Languedoc Roussillon (particularly the areas between Montpellier and Carcassonne, and the coastline), the Dordogne, the Bordeaux area and some other rural locations in south west France such as Gascony and the Lot.
Aside from that, Paris is also eternally popular for those looking for a ‘pied-a-terre’, and this year it also became attractive for those working in finance who are potentially looking to relocate. The same trend is happening around Geneva, which has influenced the demand for properties in the French Alps, particularly homes around the French side of Lake Geneva and some of the closest ski resorts such as Morzine, Les Gets and Chamonix.
Prices will continue to grow in popular areas
The French property market has been slowly strengthening over the past 2-3 years. The domestic market in many areas has become much more buoyant and there has been a significant increase in foreign investment too, particularly since the election of Emmanuel Macron.
Home Hunts expect prices to rise by 8-10% in big cities such as Paris and Bordeaux due to the huge amount of interest from local and international buyers (particularly US, UK and mainland Europeans). The French Riviera will also continue to grow in appeal to overseas buyers (we expect a 6-7% increase this year), as well as Provence and Languedoc Roussillon (around 5% increase), with some cities such as Montpellier expecting slightly more.