A quarter of British buyers have abandoned the idea of buying a property in the European Union but there is still many who want to do so, especially in France, according to new research.
Nearly two thirds with property projects underway have not been deterred by Brexit while 23% plan to accelerate purchases due to Brexit, says the latest report from BNP Paribas International.
It also reveals that the British are still the top foreign investors in France, making up 32% of non-resident transactions last year and Spain and Italy are favourites with British buyers thanks to their way of life and climate.
Some 28% of British people abandoned their Eurozone property plans following the Brexit vote a year ago, most people with property projects underway in 2017 have not been deterred.
Of the people who are still planning a property purchase some 65% claim Brexit has not incited them to abandon or postpone their purchase, and for 27% it is an intention to postpone rather than abandon plans altogether.
In France, Brexit has led one in three people with projects underway to accelerate their plans with respondents citing attractive property prices, proximity to Britain, and climate as key motivations. Many buyers were also keen to complete sooner to avoid the full impact of Brexit.
Spain, France, and Italy still rank as the top three destinations for people in the U.K, thanks to their way of life and warmer climate, and most 66% of buyers are looking for a second home.
The survey reveals that 52% of respondents who still have a Eurozone project underway are optimistic about Brexit negotiations. But British buyers are also being realistic about Brexit outcomes, with some hesitation around legal uncertainties once the UK leaves the EU.
Forecasts concerning the economic future of the UK compared to the Eurozone are also working in favour of real estate projects on the continent, according to the report.
Buyers are also monitoring the change in interest rates closely, with 77% expecting an increase in rates in the UK as opposed to 65% in the Eurozone. This is supported by news earlier this month that three of the Bank of England’s rate-setting committee backed a U.K. rate rise.
According to market data on foreign non-resident buyers, the British still account for the biggest proportion of buyers in France, with 32% of non-resident transactions last year, twice as much as the Belgians in second place. Britain also ranked in the top three nations for foreign investors in 15 out of 21 French regions.
The survey reveals that France also attracts the biggest property budgets from UK buyers, with 44% of respondents budgeting over €300,000 as opposed to 36% in Spain. When asked how they intend to finance their French project, 66% of respondents said they intend to seek a form of credit against 58% in the Eurozone.
A quarter of these buyers also intend to use loans obtained directly from a bank in France, some 8% higher than the rest of the Eurozone, while 23% are looking to release equity from an existing property in the UK and 18% are looking for bank finance via a broker.
BNP Paribas International Buyers also noted that after a significant increase in 2015, in 2016 the number of transactions carried out by British non-residents in France dropped by 9.5%.
‘The Brexit announcement provoked a slight downturn in requests and the postponement or even cancellation of some projects during 2016. However, the non-resident market has existed for several decades and has had to face many changes, as much political as economic, which generally have had little impact on the level of transactions,’ said François Laforie, general manager of BNP Paribas International Buyers.
‘In 2017, British interest in France remains high, notably due to prices which are still attractive and favorable borrowing conditions. In the first four months of 2017, we have already noted a healthy level of investment requests which are up by 6%. This is also reflected in the survey carried out by Ipsos for BNP Paribas International Buyers which shows that some buyers have accelerated their projects,’ Laforie added.
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