STRONG sterling and low property prices in France are persuading many British buyers to look again at owning property here.
Estate agents, mortgage brokers and currency exchange specialists are all reporting a surge in interest in properties across the country.
Sterling’s climb against both the euro and the dollar – at the time of writing it was at a 12-month high of €1.21 – has come as French property prices are falling, with an average 1.8% drop across the country.
Estate agents Century 21 are saying only record low interest rates kept the market going in 2013.
It also comes as the UK property market picks up and people are able to sell their property, often at a higher price.
Mark Bodega, of currency exchange specialists HiFX, said it was no surprise France remained top of the table for Britons as a sound overseas property investment as it “ticks all the right boxes”.
“Borrowing costs have tumbled in recent months; mortgage rates are at their lowest in years, and affordability has been boosted by a slower property market as worries remain that France may well be lagging behind the rest of the Eurozone in terms of economic growth.
“Of course, there’s also the added appeal of easy access from the UK, better weather and the way of life so adored by British Francophiles.”
Pippa Maile, of Currencies Direct, agreed: “It’s a buyers’ market due to the recent crises, house prices are at an all-time low and there are some attractive offerings.
“Also, British buyers in France are very resilient and also very financially savvy. They wait until the waters settle and then they continue with their plans as before. The love that the Brits have for France will last for years to come!”
Simon Smallwood, of mortgage brokers International Private Finance (IPF), said December 2013 saw a 70% increase in new clients looking for mortgages for French properties over December 2012. “There is a definite pick-up in interest with the Alps, obviously, but also south-west and Dordogne, the Côte d’Azur; all over, really.
“Over the past two years there has been continued activity in properties €250,000 and below, but the middle market was missing. Now we have clients committed to buying – who have seen a house and had an offer accepted – and this for a range of properties.”
Pippa Maile said they had seen “a steady growth in clients trading for a property purchase since the end of last year. It is still one of the top countries to invest in.”
She added: “This is the season for sales in the Alps but there is also activity in Charente, Limousin and Languedoc-Roussillon with projects being realised at an average of between €75,000-€150,000.
“Interestingly, we have also seen an enormous growth in the high-end market again, France-wide.”
Leggett Immobilier’s Trevor Leggett said: “We’re optimistic that sales of French property to international buyers will rise in 2014 – in fact we went on record last month as saying we could see an increase up to around 15,000 transactions for the market as a whole in 2014 (last year, BNP Paribas figures showed just under 11,000 sales to non-resident buyers for the year).
“We are seeing a healthy demand and are recruiting extra staff – we forecast we will need an extra 50 agents by the year end.”
Richard Kroon, of Houses on Internet, said that 2013 had been their best year, “with a 56% increase in sales” and enquiries from 45 different countries.
There were many Australians, as “they get a lot for their money!”
He added: “The British are much more active in buying and are definitely back. Enquiries have doubled which means people are prepared to spend again – and that means they must be optimistic for the future but also want to take advantage of the low prices. I think the French market has hit the bottom and this is the time to buy.”
Philippa Weitz, at Delamarche Immobilier in Normandy, agreed 2013 had been a very good year, with their highest turnover ever. “At one point in November we had so many sales going it was difficult to keep them all in mind. Hectic.
“There has been very strong demand and we have sold a wide range of properties, including chateaux, with one at €1.2m.
“But it is vital people price their properties to sell. The average price is €1,000/sq.m of internal habitable space in my area: if your property is dearer than that then, at the moment, it is not going to sell.”
And will the stronger exchange rate hold?
Daniel Cousins, head of Currencies Direct French dealing team, said: “The pound improved against all major currencies last year. Momentum is a hard intangible force to stop and, all things being equal, sterling could be set for another year of good gains.
“Investment banks broadly believe the rate by the third and fourth quarters of 2014 will be £0.81 / €1.2345 which could stimulate a new round of British buyers towards the end of the year – giving us another surge in 2014.”
HiFX’s Mark Bodega was more bullish, saying: “We expect GBP/EUR to climb further towards the €1.30 level.”
Will Wolsey, of currency brokers, World First, noted increased calls for French transfers.
“Many have been looking to take advantage by fixing the rate, with a ‘forward contract’. Others are waiting to see if the pound gets any stronger before they commit. Either way, the general picture is positive. with more UK investors showing an interest in the French property market.”