Expert Corner - Ellie Robson, Country Specialist at France Property Guide

This week, the two big themes with our readers are, of course, the upcoming EU Referendum, and also the growing popularity of leaseback schemes for those wanting to invest in French property in more uncertain times

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What are people’s concerns about the EU Referendum?
 

I am hearing from our readers views at opposite ends of the spectrum. Many are not letting the current uncertainty put them off realising their dream to buy in France – in fact, we’ve had a considerable increase in enquiries and interest in buying French property over the past year. Many people we speak to who have been planning to buy a property in France for some time aren’t going to wait any longer and have told us they will just go for it. Many are trying to get in there quick and buy their home before the Referendum takes place! There are sensible reasons for making a move before the Referendum, buying when you know you can, at the price you expect, and it seems highly unlikely that France would cut off the massive source of revenue for their economy that is made up of overseas property buyers.
 
By delaying plans to buy, the cheaper properties that were on the market before may not be available by the time buyers are in a position to move.
 
In contrast, some would-be buyers are understandably nervous about what will happen next and are putting off their plans until everything becomes clearer. There are, of course, plusses and minuses to this approach, and there is still some time to go until we have the results of an ‘In’ or ‘Out’ vote. We do not know if there will be any restrictions on British buyers purchasing in France if the UK were to leave the EU, for example. By delaying plans to buy, the cheaper properties that were on the market before may not be available by the time they are in a position to move. 
 
There is also the issue of currency, as exchange rates have been fluctuating in line with market uncertainty. We do not know how the sterling-euro rate would respond to a Brexit. Buyers in France had a great deal throughout most of 2015, thanks to sterling’s strength against the euro. However, the sterling-euro rate has dropped significantly in recent weeks, following European economic announcements, and while the UK’s negotiations with the EU continue. Once a decision has been reached, the sterling-euro rate could fall even further. In this instance, having euro assets could be of real benefit.
 
With all this in mind, it’s a really good time to talk to the team at France Property Guide and get all the latest information, as well as consulting a currency specialist if you have concerns about the exchange rate. It’s also an appropriate time to consider your options in a more uncertain marketplace; one of these may be to invest in a French Leaseback – a low risk investment in a volatile world! 
 

Leaseback – how does it work?
 

Leaseback schemes are a great way for people to invest in a property. It differs slightly to other property investments, in that you own the property outright, but with a leaseback property, the VAT is refunded back to you. This makes all the difference in France, as the VAT in France is around 20 percent, so this either covers the cost of or considerably reduces the deposit you have to put down on a property. You then lease the property back to the developer or letting agent and they oversee the rental of the property. The owner receives a guaranteed annual return, regardless of whether the property is actually let or not. The downside, however, is that trips have to be carefully planned out in advance. This type of property investment is particularly popular in skiing resorts, which still have year-round appeal, and the ever-popular South of France, where property is traditionally more expensive – who can say no to a bargain property on the Cote d’Azur?
 
Do get in touch if you have queries, concerns, or need help buying your home in France. We are here to help you make your dreams a reality and to help you buy safely in France.

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