European property agents are optimistic about future demand from British buyers, despite the UK’s recent vote to leave the European Union.
The referendum, which saw 52 per cent elect to exit the EU, caught many by surprise, with the pound weakening in the immediate aftermath of the result. Nonetheless, the mood is upbeat on the continent, with agents positive about interest from British buyers.
In France, luxury and investment real estate specialist Home Hunts says that the level of enquiries from buyers “does not seem to have been affected so far”, with a large number of visits planned.
“Since the news broke on Friday the team has agreed three purchases for clients and are currently negotiating two more offers,” says Tim Swannie, Director of Home Hunts.
Swannie says that momentum is expected to slow down in the short-term, but the agency generally feels optimistic about the UK’s ongoing relationship with the French property market.
“The interest from the UK has dropped off a little, I think this will continue to be the case while the UK negotiates its departure from the EU,” says Tim. “However, I cannot imagine that the buying process will become much more difficult for UK buyers in the future. Non-EU residents make up around 30 per cent of our clients at present anyway and the process for them is very straight forward.”
France remains financially attractive too: over the last 12 months, a combination of flexible property prices, low interest rates and favourable currency pairings have meant that buyers could negotiate deals with vendors that may not previously have been possible.
A recent study from French bank BNP Paribas found that in 2015 there was a 29 per cent, with sales to Brits increasing 44 per cent. While the pound is weaker than then, Swannie notes that “the current pound to euro rate is still favourable” and interest rates are “even lower in France than they were earlier in the year”.
“British have always been one of the biggest buyers of French property,” adds Camille Letuve Partner at Athena Advisers. “We expect lengthy bilateral negotiations in order to define the new tax rules imposed on British owners in France. In this time, transactions from those in the UK are likely to drop, but will be sustained by mortgage rates.”
Indeed, Caisse d’Epargne is currently offering mortgage rates at 1.3 per cent over a 15-year period.
“Despite the uncertainty surrounding Britain’s future role in the EU, buyers are still in an excellent position to purchase French property,” concludes Swannie.
Healey Fox highlights the country’s ongoing lifestyle appeal for foreign buyers as well.
“Whatever happens to sterling, property prices will remain cheaper, the pavement cafes still await us, the markets are brimming with fresh local produce and the sun is shining,” says the agent.
Francois Marchand, Director of Erna Low Property, French Alpine property specialists, comments: “The mountains were there before EU existed, and will be there tomorrow to welcome any international property investors, part of the EU or not.”
Another constant are the taxes applying to French real esate.
“There will be no change in buying costs for those looking to buy property in France, and there are no planned changes in taxations for the income made from property rentals, as well as no difference in capital gain tax – as of 1st of January 2015 a single rate was applied for EU and Non-EU members,” continues Marchand.
Brexit’s impact will not just be limited to UK buyers and interest. Agents are optimistic, though, about the wider ripples of the decision too.
“In Paris, higher international demand will increase real estate prices in the years to come, providing good prospects for capital gains. This will be fuelled by low interest rates for non-resident investors,” continues Letuve.
“The movement of currencies on the euro, such as the dollar, will only fuel this even more. US buyers and those from dollar-pegged countries have become almost 4 per cent better off on European property overnight and are now 24 per cent better off than they were this time two years ago.”
In Portugal, Letuve predicts that flexible real estate-led residency programmes such as the Golden Visa scheme will continue to attract non-EU investors to capital city Lisbon.
“For investors from inside the EU, they will continue to utilise Portugal’s tax-efficient non-habitual residence scheme with no wealth tax and low income tax,” she adds.
“Just as we saw after the 2008 sub-prime crisis, cities primed for capital gains will once again be heavily targeted. Lisbon falls into this category, with prime central property prices at a third of Paris and London. Prime prices in Lisbon have increased 30 per cent since 2013 and this trend is set to continue.”
In Spain, Martin Dell, Director of Kyero.com, says the portal is “optimistic” too.
“Brits buy in Spain for the wonderful climate and bohemian lifestyle. That hasn’t changed and houses in Spain will always have a pull for the British purchaser,” comments Dell.
“There was a very healthy market for Spanish property before Spain joined the Eurozone and there’ll still be a thriving market once Britain leaves. Property prices in Spain remain relatively low, and this is still an excellent time to make a shrewd investment in the Spanish property market.”
On TheMoveChannel.com, the morning after the vote, the number enquiries for property in Spain rose 11 per cent compared to the previous day. Enquiries for French property also rose 400 per cent, while enquiries for Portuguese real estate rose 50 per cent.Google+