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Brexit, two months on: what now for the ski property market?

How has Brexit affected propertyAs the dust settles on the UK’s vote to leave the EU, it’s time to reflect on what the decision could mean for buyers – and owners – of property in the French Alps. There are still many unknowns (not least when will Britain trigger Article 50), but for Brits the Bank of England’s decision to reduce interest rates and the volatility of Sterling are two of the immediate effects of the Brexit vote. So, two months on, how is Brexit likely to impact the ski property market?

What are we seeing in the French Alps?
Uncertainty is a downer for any property market, and buyers were more inclined to wait for the outcome of the Referendum before making any decisions. Those who may have put their plans on hold prior to the result are coming back to the market now the initial shock has worn off.

Katy Stebbing, in Les Gets and Morzine, reports that enquiries are back up to a reasonable level for the time of year commenting that it seems as though buyers are deciding to crack on with their plans rather than put everything on hold while the UK negotiates its exit.

For Sale signs UK after BREXITIsobel Laing, our Chamonix representative, notes that confidence in the higher end of the market has improved, with more enquiries from clients with a larger budget. Some buyers are viewing the next two years as the window in which to buy a property in the mountains without complication.

Overall, those France Property Angels clients who had already booked their summer property viewing trips, did not cancel their plans. They came out to the Alps, visited chalets and apartments and enjoyed all that the mountains have to offer in the summer. And there’s the crux of it, if you love spending time in the mountains, at any time of year, nowhere can beat the French Alps. It will continue to appeal for its short flight time (plus easy access by train and car) and the breadth of resorts from small, farming villages to more purpose-built centres with ski-in/ski-out convenience.

What does the future hold?
It is too early to draw any valid conclusions for the ski property market. Trends may emerge in the next 6 to 12 months, but until then we can only anticipate what Brexit may mean in the long-term. It is also worth remembering that Brits are only one sector of the alpine property market; many other nationalities also invest in the French Alps. So for Brits looking to buy what are the main concerns?

Future restrictions on using their ski chalet or apartment is an understandable worry for potential buyers – as well as current owners of ski property. So far the signs are that British owners will not lose their rights to own or use their EU property (remember, many EU citizens also own property in the UK). Regarding taxation the double taxation treaties in place between countries will also remain in place and are unaffected by EU membership.

Currency is another concern, especially given that Sterling is likely to continue to be unpredictable as we get used to an EU with the UK. Kate Hodge, France Property Angel in Grand Massif, suggests talking to a currency broker (we work closely with Currencies Direct), who may advise on a forward contract to protect your currency position between an offer and completion of the purchase of a property.

Availability of financEU UK flag Brexite is another concern. French mortgage lenders do generally lend a larger LTV to EU residents and once the UK leaves the EU lending criteria may change for Brits. As French mortgage rates at a historic low, Brits should take advantage of the finance available to EU residents while they can. BNP Paribas can offer further advice on this.

For interest, the Association of International Property Professionals (AIPP) is seeking to engage with the Government to protect the rights of British owners and future buyers of EU property. Their report identifies 20 key points for this sector of the market, to achieve positive outcomes for British property owners in the EU.
For more detail, click here.

Some final thoughts
– It is expected that it will take at least 2 years, if not longer, before Britain negotiates its exit from the EU. Why wait until then to enjoy all that a ski property can offer?
– The Referendum does not change that Brits love to own property at home and abroad. A ski property will continue to be a desirable asset for ski enthusiasts and other fans of mountain sports.
– Stamp duty on new-build ski property now compares favourably with stamp duty on a second home in the UK – 2% versus 5%.
– Why keep your money in the bank earning little or no interest, when you can be enjoying your own ski chalet. After all, compared to the UK, the French Alps will always have more snow, more sunshine and a great “joie de vivre”.

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