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Brexit threat should not hamper Brits buying in France
British people looking to buy a property in France this year are being urged not to worry about the vote on the UK staying in the European Union due to take place in June. There have been scare stories about what might happen if the UK leave the EU bit according to agents in France very little is likely to change. Indeed, they are reporting an uptick in inquiries which suggests that in reality potential buyers are not worried. According to Trevor Leggett, chairman of Leggett Immobilier which has agents across France, there has been no slowdown in demand from UK purchasers and activity is 40% higher than 12 months ago which was a record year. ‘Our view is that even if the vote was to leave the EU there would be little in the way of substantial change. The polls suggest it will be tight but tipped towards an In vote,’ said Leggett. According to Sextant French property even if the public vote to leave the EU nothing would happen suddenly. There would be a period of negotiations over benefits, pensions and healthcare which might affect expats but not necessarily second home owners. The firm has just reported a record year with an estimated 800,000 sales made in 2015, and buyers are making the most of current market conditions which include favourable exchange rates, low mortgage rates and low prices. ‘A Brexit would not stop you from buying your dream house across the Channel. Nany non-EU buyers from as far flung destinations as Australia and China already buy in France undeterred. The Brexit uncertainties lie largely in tax arrangements, obtaining mortgages and the potential weakening of the pound,’ said a Sextant spokesman. ‘Tax arrangements will depend on negotiations in the grace period following the referendum, though happily double taxation agreements will remain unchanged, ensuring you will never be taxed twice on your income,’ he explained. ‘In the short term run up to the referendum certainly, the pound could drop as uncertainty and instability will always disturb the markets to some extent. Once an outcome has been reached, we can hope that the markets have enough confidence to begin to level out,’ he added. For British people living in France there may not be much change. If the UK votes to leave it is highly likely that it will become a member of the European Economic Area (EEA). Iceland and Norway are already members. EEA membership could also result in retention of the European Health Insurance Card (EHIC) card and thus access to healthcare at the same rate as currently. The UK has never been part of the Schengen agreement of totally free border control so nothing would change. ‘Whichever way the UK votes, at Sextant we don't believe British interest in buying French property will be dampened, nor do we believe that the dream will become unattainable or unviable,’ he concluded. Continue reading
Rental prices in UK up by 2.6% in last 12 months
Private rental prices paid by tenants in the UK rose by 2.6% in the 12 months to January 2016, up from 2.5% in the year to December 2015, the latest index shows. The data from the Office of National Statistics (ONS) reveals that rental prices grew by 2.7% in England, 0.3% in Wales and 0.8% in Scotland with rents up the most in London at 3.9%. It means that overall rents are up 0.1% in annual terms compared with the year to December 2015, and up 0.7% compared with the annual price increase in January 2015. The regional breakdown of the figures shows that annual rental price growth varies, rising in Yorkshire and The Humber from 0.8% to 1.2%, and in the North East from 0.6% to 0.9%, whereas it fell in Wales from 0.7% to 0.3%. Rental growth in Scotland has gradually slowed to 0.8% in the year to January 2016, from a high of 2.1% in the year to June 2015. Rental prices in England show three distinct periods, increasing from January 2005 until February 2009, then decreasing from July 2009 to February 2010, and increasing again from May 2010 onwards. When London is excluded, England shows a similar pattern but with slower rental price increases from around the end of 2010. Since the beginning of 2012, English rental prices have shown annual increases ranging between 1.4% and 3% year on year, with January 2016 rental prices being 2.7% higher than January 2015 rental prices. Excluding London, England showed an increase of 2% for the same period. A shortage of suitable properties combined with strong demand, both from people priced out of the housing market and those who prefer to rent, lies behind these increases, according to Steve Bolton, founder of Platinum Property Partners. He believes that the Government is taking an enormous gamble on the private rental sector through its announced changes to buy to let investment and this could affect prices and growth. ‘Ending tax relief for landlords and levying a higher rate of stamp duty will ultimately increase investor’s costs, forcing many to push tenants’ rents up to remain profitable. Standards may also be reduced, with landlords having fewer funds to invest in the quality of their property. In some instances, landlords will be forced to sell, adding additional strain to private rented sector housing stock,’ he explained. ‘It is hard to see how the proposed changes will benefit prospective first time buyers. The biggest barrier to homeownership is a lack of adequate property supply, and discouraging buy to let investment will do nothing to alleviate this. With prices standing at such high levels, first time buyers need to raise a substantial deposit and as rental prices continue to grow this will become ever more difficult,’ he added. Jonathan Hopper, managing director of the buying agents Garrington Property Finders, believes that the traditional January uptick in activity and a scramble by second home and buy… Continue reading
Home lending in Scotland up in 2015, but tailed off at end of year
More first time buyers took out a loan for a home in Scotland in 2015 than in any year since 2008, the latest data shows. Home owner house purchase lending in the fourth quarter of 2015 totalled 17,200 loans, down 4% on the third quarter but up 14% in the fourth quarter 2014, according to the figures from the Council of Mortgage Lenders. A breakdown of the figures shows that first time buyers took out 8,000 loans, 2% down on the previous quarter but up 14% on the last quarter of 2014. They borrowed £870 million, down 2% on the previous quarter but up 14% on the fourth quarter 2014. Home mover lending totalled £1.4 billion, down 4% on the previous quarter but up 18% on the fourth quarter 2014. The number of loans in the period was 9,200, down 5% quarter on quarter but up 14% on year on year while remortgage lending went up by volume quarter on quarter and year on year. Annual home owner house purchase lending in Scotland totalled 64,800 loans, up 9% on 2014. This came to £8.5 billion, up 14% on 2014. First time buyers took out 30,000 loans worth £3.3 billion, up 8% by volume and 12% by value, on the previous year. Meanwhile, home movers took out 34,800 loans worth £5.2 billion, up 9% by volume and 15% by value, compared to 2014 while remortgage lending came to £3.1 billion, up 18% on 2014. This totalled 26,200 loans, up 12% on the previous year. ‘The sustained year on year growth in house purchase lending seen since 2012 continued in Scotland this quarter,’ said Linda Docherty, CML chair for Scotland. ‘This meant more first time buyers and home movers in 2015 took out a loan to purchase a home than in any year since 2008. With an economic climate of low interest rates and competitive mortgage deals, we would expect this growth in the Scottish market to continue into 2016,’ she added. Continue reading
