State of the mar­ket

For our quar­terly re­port, Ruth Wood finds the French prop­erty mar­ket in ro­bust health and prov­ing ir­re­sistible to Bri­tish buy­ers.

French Property News - - Contents -

The lat­est news on the French prop­erty mar­ket, with em­pha­sis on Bri­tish buy­ers

Did you see the Bastille Day cel­e­bra­tions in Paris when a French army band en­ter­tained Em­man­ual Macron and state vis­i­tor Don­ald Trump? In­stead of play­ing mil­i­tary march­ing tunes, the play­ers belted out a med­ley of re­cent hits by home­grown pop­stars Daft Punk.

The French pres­i­dent beamed all the way through the per­for­mance. The US pres­i­dent did not. As the TV cam­era flipped be­tween Macron’s de­lighted grin and Trump’s stony ex­pres­sion, it seemed to some­how cap­ture the French feel­good fac­tor of 2017 – a spirit of con­fi­dence and op­ti­mism that is re­flected in its flour­ish­ing prop­erty mar­ket.

Macron on the move

Of course, France’s youth­ful new pres­i­dent can’t take all the credit. The French hous­ing mar­ket, which crashed dur­ing the global fi­nan­cial cri­sis of 2008, has been look­ing sig­nif­i­cantly health­ier for over a year now, long be­fore he took of­fice in May. How­ever, the lib­eral for­mer banker, whose party En Marche! lit­er­ally trans­lates as ‘On the Move!’, has at­tracted praise for his pro-busi­ness ap­proach and his prom­ises to cut red tape for own­ers and ten­ants as well as ex­empt­ing 80% of house­holds from the French equiv­a­lent of coun­cil tax.

Against this back­drop, the re­cov­ery of the hous­ing mar­ket is gath­er­ing pace. The lat­est fig­ures from the No­taires de France show that some 907,000 prop­er­ties (ex­clud­ing new-builds) changed hands last year, more than was forecast and com­fort­ably beat­ing the pre-cri­sis peak of 2006.

“It’s no hous­ing bub­ble, since 90% of the buy­ers are look­ing for a place to live, not let,” say the re­port au­thors.

Re­al­is­tic prices, low in­ter­est rates and at­trac­tive mort­gage deals are cred­ited with driv­ing the come­back as well as the up­beat po­lit­i­cal land­scape.

Are the Brits buy­ing?

Yes, say the agents, lawyers and cur­rency spe­cial­ists who spoke to us. The lux­ury mar­ket is en­joy­ing a par­tic­u­lar up­surge (see over­leaf) but de­mand at the low and mid­dle end of the mar­ket is grow­ing too, ac­cord­ing to Leggett Im­mo­bilier. The na­tion­wide es­tate agency, which has a di­verse and in­ter­na­tional clien­tele, is re­cruit­ing hard across France to keep pace with cur­rent de­mand from Bri­tish buy­ers.

“We have seen a 27% in­crease in our sales pipeline over this time last year,” said chair­man Trevor Leggett. “Par­tic­u­lar hotspots are the Midi-pyrénées where our team is on fire and the peren­nial favourites of the Alps and south-west.” What about the im­pact of the EU ref­er­en­dum? “The Brexit back­lash con­tin­ues,” he said. “De­mand from Bri­tish buy­ers re­mains strong.”

Other agents agreed, say­ing that while the prospect of leav­ing the EU has de­terred some buy­ers, it has in­vig­o­rated oth­ers.

“Many of our cus­tomers sim­ply want to own a small piece of France and Europe,” said Benoîte Bernardeau, of Argu’s Im­mo­bilier, based in ru­ral Vi­enne. “Bri­tons al­ready set­tled in the re­gion were

some­what dis­con­certed by the Brexit vote but this did not gen­er­ate a mass de­par­ture. On the con­trary, fol­low­ing the EU ref­er­en­dum, our con­tact with Bri­tish buy­ers has in­creased.”

Any hard statis­tics?

This trend is borne out by na­tional fig­ures. In July, as Brexit ne­go­ti­a­tions got un­der­way, bank­ing group BNP Paribas pub­lished a re­veal­ing Ip­sos poll. It showed that more than seven out of 10 Bri­tons in­ter­viewed in April last year about their plans to buy in the eu­ro­zone were still keen to press ahead in April this year or had al­ready bought a prop­erty, de­spite the Brexit vote.

Al­though 28% of the 1,100 re­spon­dents said they had aban­doned their projects over that time, a whop­ping 72% were un­de­terred. The re­port also found that the Bri­tish were still the top for­eign in­vestors in France, com­pris­ing just un­der a third of non-res­i­dent transactions last year.

Matthew Cameron, a UK specialist of French law at Ash­ton’s Le­gal, said the mar­ket seemed to have par­tic­u­larly picked up since March.

“I won­der if the fact that the Ar­ti­cle 50 no­tice has now been served has led to a lit­tle more cer­tainty,” he com­mented. “Even if we do not know what the fi­nal deal will bring on leav­ing the EU, we ac­cept it will hap­pen. What has not changed is our gen­eral Fran­cophile out­look.”

Who is buy­ing?

As well as su­per-rich buy­ers in­creas­ingly in­vest­ing in or re­lo­cat­ing to France, hol­i­day home hun­ters are dom­i­nat­ing the mar­ket, say in­dus­try ob­servers.

“I would say about three­quar­ters of our clients are look­ing for sec­ond homes,” said Charles Miller, di­rec­tor at Char­ente Im­mo­bilier: “The pro­file of buy­ers has shifted away from those look­ing to make per­ma­nent moves or re­tire.”

High on the wish­list is a ren­o­vated or new prop­erty that needs no work as well as a prop­erty that can pro­vide an in­come, he added. “This seems to arise from Bri­tish buy­ers in par­tic­u­lar as they see this as a way of be­ing able to have a se­cure sit­u­a­tion in France in the event of Brexit.”

It’s a sim­i­lar story fur­ther south at Charles Small­wood’s busi­ness Agence L’union which cov­ers Tarn, Tarn-et-garonne, Lot and Avey­ron. Many of his clients are look­ing for a sec­ond home they can en­joy and let for a num­ber of years be­fore mak­ing a per­ma­nent move.

“More and more are seek­ing homes with rental units so they have room for all their fam­ily or in or­der to rent them out and have an in­come from guest­houses,” he said.

How much are Bri­tish buy­ers spend­ing?

Tra­di­tional homes with grounds, views, a pool and nearby ameni­ties re­main peren­ni­ally pop­u­lar, and the most com­monly re­ported bud­get is be­tween €200,000 and €250,000, ris­ing up to about €500,000 for per­ma­nent homes.

But there is also sig­nif­i­cant move­ment at the lower end of the mar­ket. Many of the Bri­tish sec­ond-home buy­ers look­ing in Vi­enne start with bud­gets below €80,000, ac­cord­ing to Argu’s Im­mo­bilier, but with the in­ten­tion of spend­ing more when they move to the area per­ma­nently.

Uk-based Dan Brewer, whose com­pany Healey Fox works with as­so­ciate agen­cies across France, said: “Some peo­ple who are a bit ner­vous but don’t want to give up on their dream are go­ing for ren­o­va­tion projects, look­ing to spend €50,000-60,000.”

Al­though house prices are climb­ing steeply in cities such as Nancy, Bordeaux and Paris, the vol­ume of prop­er­ties for sale in the coun­try­side is keep­ing prices there in check, says Charles Miller, of Char­ente Im­mo­bilier.

“Prices are the low­est they have been for more than a decade – and with in­creased num­bers of Bri­tish sell­ers seek­ing to re­turn to the UK (and the low value of ster­ling) there are some real bargains for those pre­pared to com­mit and act quickly,” he said.

It’s cer­tainly a buyer’s mar­ket, agrees Benoîte Bernardeau of Argu’s Im­mo­bilier. “Peo­ple can find qual­ity homes for very at­trac­tive prices and en­joy the his­tor­i­cally low in­ter­est rates,” she said.

In re­cent months, Agence L’union in Tarn-et-garonne has

sold a ren­o­vated house with hab­it­able pigeonnier, gar­dens and pool for €219,000 and a fivebed­room manor with pool in two acres for €550,000. An­other re­cent sale at a “give­away price” was an ar­chi­tect-de­signed house with three-quar­ters of an acre and lovely views for €85,000.

Is it worth wait­ing?

The un­cer­tain­ties sur­round­ing Brexit and the co­in­cid­ing fall in ster­ling has prompted over a quar­ter of Bri­tish buy­ers to pause in their pur­suit of a dream home in France. A sim­i­lar pro­por­tion, mean­while, are rac­ing ahead to get a foothold in Europe be­fore Bri­tain’s ex­pected exit from the EU in March 2019, en­cour­aged by talk of pref­er­en­tial treat­ment for cit­i­zens es­tab­lished in the coun­try be­fore this cut-off date. To avoid be­ing at the mercy of the volatile ex­change rate, cur­rency ex­pert Laura Par­sons, of TORFX, urges pur­chasers to talk to a rep­utable cur­rency bro­ker about ser­vices such as for­ward con­tracts, which en­able you to fix a rate for up to two years in ad­vance of a trans­fer. “With Brexit ne­go­ti­a­tions set to drag on for some time and both the Bank of Eng­land (BOE) and Euro­pean Cen­tral Bank (ECB) caus­ing waves with their ap­proaches to mon­e­tary pol­icy, fur­ther GBP/EUR ex­change rate move­ment is a cer­tainty,” she said.

In terms of prices, Brits shouldn’t ex­pect the coun­try­side bargains to per­sist in­def­i­nitely, say agents. Ed­ward Lan­dau, whose

agency Le Bon­heur Prop­erty cov­ers the far south-west area, says the prop­erty mar­ket re­cov­ery is grad­u­ally ra­di­at­ing out from the cities into ru­ral ar­eas.

“Con­fi­dence is re­turn­ing,” he said. “We are based some two hours from Bordeaux and are see­ing a knock-on ef­fect as clients re­alise the op­por­tu­ni­ties that are avail­able fur­ther south.”

He­si­tat­ing may not be the best pol­icy, he cau­tions. “The mar­ket is im­prov­ing over­all and our con­cern is that those who are stand­ing on the side­lines wait­ing for more clar­ity about the sit­u­a­tion are likely to be dis­ad­van­taged by the fact that prices are likely to rise.”

Many of our cus­tomers sim­ply want to own a small piece of France and Europe Benoîte Bernardeau, Argu’s Im­mo­bilier

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