Six Months after the referendum, are Brits still buying in France?
December 23rd marks six months since the referendum on Britain's membership of the European Union. Since the announcement that Britain had voted to leave the European Union, the effects of this important decision have been visible in the international property market.
France has traditionally been one of the countries with the largest numbers of British Ex Pats, with 190,000 Brits living in France, according to recent UN Figures. But with all the economic turmoil following the Brexit announcement, will UK-based buyers still look to France as a home from home?
Tim Swannie, director of leading buyer's agent Home-Hunts, reflects on the impact of the referendum so far.
Tim said: “The number of enquiries from UK clients has reduced this year which is understandable; some people are waiting to see what happens with the Brexit drama, and others have been put off because of the pound to Euro exchange rate.
Funnily enough, we've also had a number of British clients buying specifically because of Brexit; they want to make sure they own a property in the EU before the UK officially leaves.
There have been two specific areas where we have seen a rise in enquiries from the UK: Paris and also the French Alps. The majority of these enquiries come from clients who work in Finance; some are looking to relocate closer to Paris or Geneva and others are buying for investment purposes, with a view to relocation in future.
There's no arguing that Sterling is low at the moment against the Euro, so the timing isn't ideal for UK-based cash buyers. However, we've found many clients are taking mortgages instead. Many French banks offer what is called a 'back to back' loan, whereby you can deposit your money in Sterling with them and then you borrow the same amount in Euros. This is a perfect solution to avoid taking a hit on exchange rates. Then, when rates improve in future, buyers can choose to pay off the mortgage.
Many clients are specifically asking us about UK sellers because of the exchange rate to Sterling. British buyers are generally quite flexible at the moment if they are changing their money back to Sterling. Having said that, as a buyers' agent, we've found that most owners are flexible currently. It's certainly a buyer's market at the moment, and with the uncertainty of Brexit still looming in 2017, and the upcoming general election in France, we expect it to remain that way into next year too.
The majority of clients at the moment are coming from mainland Europe, specifically Scandinavia, Benelux and also Germany. We are also getting a lot of interest from Swiss, American and Middle Eastern clients.
All areas have been quite busy, but the real stand out areas in terms of sales have been Cannes, Sainte Maxime to Saint Tropez, Montpellier to Narbonne, The Dordogne, Chamonix, Morzine and Paris. We've agreed sales on all kind of properties ranging from small renovation projects around 600,000 Euros through to a 7.2 million Euro apartment in Paris and a 19 million Euro contemporary villa in Saint Tropez.”