As PACA Area Manager of Leggett Immobilier, I can tell you that our half-year figures are in and it’s clear that UK buyers are back in force. The first six months of 2014 show an overall increase in sales of 35% and our pipeline of “offers accepted” and “contracts exchanged” has doubled over this period. This gives us confidence that this is a clear trend in the market place, which will continue throughout the year.
Although the number of international buyers in PACA dropped by 16% last year, it’s interesting to note that sales to buyers from the UK actually rose quite substantially and we’re seeing increasing demand across the country. In particular, our teams in the neighbouring Languedoc-Roussillon and Midi-Pyrénées regions have seen sales rise sharply.
In 2013, the average price paid by international buyers in PACA was €565,000
We’re convinced that this increase in demand is due to three factors:
Consumer confidence in the UK economy and property market (something that is not necessarily shared by all other European countries).
Continued low interest rates allowing French property to be financed cheaply and relatively easily compared to previous years.
The perennial desire of UK buyers to have a home in France where the weather, culture and simple way of living is seen as attractive compared to the stress of UK living.
Just how long the current interest rates will last for is uncertain. A small increase in the cost of borrowing over the second half of 2014 would have little or no effect on demand. However, if, as seems increasingly likely, interest rates were to rise dramatically then this could dampen things.
You can now get a fixed mortgage with 80% loan to value at around 3.25% or a variable rate with 80% loan to value at around 2.60%. With the overall fall in property prices we have seen over the last couple of years many of our buyers have said that they see this as a “window of opportunity”.
A small word of caution though, “improving market” does not equal “increasing market”: buyers are very much aware of market conditions and will be looking for value for money and correctly priced, well-presented properties.