Tag Archives: france
Fewer foreigners buying in France as housing market shows signs of improvement
Foreign buyers are not yet returning to the French property market with the latest figures from Notaires showing that numbers have dropped almost threefold in the last decade. Overseas buyers made up just 1% of property sales in 2015 compared to the peak of 2.8% in 2006, just before the global economic crisis. This number dropped to 1.4% by 2014 and then to 1% in 2015 and numbers are not likely to rise much in 2016. But there are signs that the property market in France is picking up with figures, which exclude new builds, from the Notaires showing that overall house prices increased by 0.4% in the final quarter of 2015 while apartment prices rose 0.3% in metropolitan areas, but are down 1.6% and 1.9% year on year respectively. In Paris and the surrounding area house prices increased by 1% in the third quarter of 2015 and apartment prices were up by 0.7%, House prices are now down 1.1% and 1.3% year on year respectively. In rural areas house prices increased by 0.2% quarter on quarter but apartment prices fell by 0.1%. House prices are down 0.7% year on year and apartment prices down 2.3% year on year. They predict a stable market in the coming months with apartment prices up around 0.4% and house prices by 1.4% by the end of the first quarter. The report adds that a year on year rise in sales of 12.5% up to the end of November 2015 bodes well for the market in 2016. This level of sales has not been seen since Spring 2012. British buyers still make up the majority of overseas buyers, purchasing some 32.6% of foreign bought property in 2015. The next most common nationality was Italian, at 15.3% and Belgians at 11.1%. The most popular parts of France for British buyers remain old favourites like Normandy, Brittany, the Dordogne and the Loire. They buy just 7% of foreign owned property in Paris. In Normandy and Brittany some 72% of buyers are British, 10% Belgian and 3% German, while next door in an area covering the Loire and Dordogne some 78% of foreign buyers are British, 6% Belgian and 5% Dutch. The British are also the biggest group of foreign buyers in Aquitaine and along the Spanish border towards Provence at 42% with 15% Belgian and 12% Spanish or Portuguese. While in the Alps and down the Rhone some 32% are British, 22% Swiss and 12% Belgian. In PACA the largest group of foreign buyers are Italians at 28%, British at 15% and Scandinavians at 12%. In the North East 28% are Belgian, 17% British and 14% Dutch while in an around Paris 20% are Italians, 8% American and 7% British. Despite the fall, the report from the Notaries’ indicates that the financial climate for foreigners, particularly British people due to currency rates, for buying a house in France remains positive. The Notaries’ report says that since the Spring of 2015 the… Continue reading
Agents predict a good year for French property sales to overseas buyers
Having seen prices fall in recent year, the residential property market in France is set for stability in 2016 with agents predicting that it will be a good year for overseas buyers. In particular agents believe that low interest rates for mortgages in France and a better currency exchange rate for British buyers will entice many into buying a home in the country in the coming year. It is still a buyers' market but properties are definitely selling much better than previous years. When owners are keen to sell and are willing to be realistic with their prices, a buyer is usually found quickly. Among those predicting a strong year for sales in France is Tim Swannie, director of Home Hunts. The firm is seeing interest from UK based clients as well as buyers from across mainland Europe, particularly Scandinavian countries, Belgium, the Netherlands and Switzerland, and also from the Middle East, China, South Africa and the United States. He pointed out that the French Riviera property market has remained relatively buoyant throughout the economic crisis but really took off in 2015 and he believes that it will continue in the same direction in 2016. ‘I think prices will remain stable and we may even see a small increase. Other areas which are proving very popular are Provence, Languedoc Roussillon and the Dordogne as well as vineyard properties around the Bordeaux area,’ he explained. Trevor Leggett, chairman of Leggett Immobilier, describes the current market as offering buyers a ‘once in a decade’ opportunities. ‘British buyers have benefited from a weak euro, cheap borrowing and the lowest French property prices in years. Subsequently they have been snapping up bargains all over France. In 2014 sales to UK buyers made up 70% of our business, last year this rose to 77%,’ he said. The average age of people buying was 53 and the bulk of buyers were people approaching, or at, retirement age. ‘We know that France always comes out on top of the quality of life surveys and it has one of the world's best healthcare systems so it's no surprise many people want to spend their golden years here,’ said Leggett. ‘However, we also saw a significant number of young professionals and families snapping up bargains, we saw a rise in the 40 to 50 age group with many families looking to take advantage of the excellent education system and a less stressful way of life,’ he added. The firm found that south west France was exceptionally popular with data showing increased sales in all regions. The biggest increase in buyer numbers was along the south coast in Languedoc Roussillon and PACA. The firm didn't see any significant changes in average spend but did see quite a big jump, around 25%, in buyers seeking a mortgage for their purchase. ‘This leads us to believe that buyers have confidence in the French market and the prospects of long term capital growth with fixed rate… Continue reading
Details of extra tax on UK buy to let and second homes unlikely before mid-March
The final details of how the extra stamp duty on buy to let and second home purchases will work will not be known until a couple of weeks before the new tax rate comes into effect in April this year. The government’s consultation period on the proposal for a 3% tax on these kind of property transactions runs until 01 February and officials will then consider the responses and are expected to confirm the final details on the annual Budget announcement on 16 March. The proposal is that the extra rate will apply to most purchases of additional residential properties where, at the end of the day of the sale, individual buyers own two or more residential properties and are not replacing their main residence. The higher rates will also generally apply to purchases of residential property by companies. It would seem that the 3% rate will not apply if at the end of the day of the sale an individual owns only one residential property, irrespective of the intended use of that property. However if following the transaction the individual owns two or more residential properties, the applicability of the additional rate will depend on whether the purchaser is replacing their main residence. Liam Bailey, global head of residential research at real estate firm Knight Frank, has pointed out that while the consultation assumes that most people will buy a new main residence on the same day as they sell their previous one, there will be an allowance for purchasers to have up to 18 months to replace a main residence following an earlier sale. Also where an individual sells their previous main residence after purchasing a new main residence, a refund of the higher rate could be claimed with the window for this refund limited to 18 months after the purchase of the new residence, he explained. He also said that it would appear that the location of additional properties will be global, so the ownership of a property in France for example, will be relevant. Also, the new rate will apply if the purchase is completed on or after 01 April 2016. However, if contracts were exchanged on or before 25 November 2015 but not completed until on or after 1 April 2016, the higher rate will not apply. The details will be important as there are a number of scenarios that could play out, for example parents buying a property for their children, joint purchases between friends and partnerships. Stephen Barratt, private client tax director at accountants and business advisers James Cowper Kreston, believes that the proposed legislation will create uncertainty, introduce many anomalies and take a long time to fully bed down. 'The fact that the new rules are intended to apply to completions on or after 01 April 2016 will mean that many purchasers will be exchanging contracts now without knowing what the final rules will be. This will create uncertainty,' he warned. 'The additional 3% rate is intended… Continue reading
