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The current debate on whether the UK should remain in or leave the EU seems to be producing more heat than light with many ‘undecided’ or ‘unsure’ voters complaining that they are unable to make an informed decision given the lack of ‘facts’. On the one hand we have ‘Project Fear’ on the other, a path to ‘sunlit uplands’ that is not well signposted. What is clear however, that similarly to truth in war, facts will be the first victim in this debate.

Where does this leave potential buyers of property in France? What should they do?

As a French business we do not express an in/out viewpoint and our opinions are entirely objective. They are intended to help individuals considering purchasing property in France and help them analyse the risks, real or perceived.

What should buyers consider?

The most important part of any purchasing decision revolves around the price/value dynamic and preservation of value over the term of ownership. Buyers should be concerned that they are paying the right price for a property but all too often don’t, irrespective of Brexit or any other geo-political event. As we have often opined, value and price can differ considerably, particularly in the south of France and it is vitally important purchasers take advice.

If buyers pay fair market ‘value’ then the downside risks to their investment will be low. The markets in which we operate are truly international and not confined to British buyers, although they are clearly an important element. The history of the south of France and Alpine markets shows us that even if one particular nationality retreats from the market temporarily, another steps in to fill the void. This characteristic, over the medium to long term, has protected asset values in the region over the years. Therefore, it is our view that buyers should not be dissuaded by the possibility of Brexit. Values of properties that attract international buyers will be largely unaffected.

Potential currency fluctuations are a concern and will have an impact on investment decisions. The received wisdom is that the Pound will weaken against the Euro in the event of a Brexit vote. Any significant weakening would obviously impact on the overall budgets of UK and Sterling based buyers. How realistic is this outcome and how long would it persist? We are not currency experts, (even if such beings exist), but we believe any fluctuation would be short lived. The UK would have a 2 year window to negotiate its terms of withdrawal from the EU and we believe any hyperbole of impending doom would diminish fairly rapidly. The world would keep spinning. One could also argue that the upside for Euro strength against the Pound is limited given the persistent and continuing structural problems within the Eurozone. Sadly, in situations such as this, our crystal ball will be just as reliable (or otherwise) as anyone else’s. The key thing for any buyer, regardless of currency values, is to pay the correct value in which the property is denominated, in this case Euros.

What are the risks?

We believe that buyers should look at the medium to long term characteristics of the market in which they are considering investing. Most buyers of occasional/holiday homes do not see their acquisition as a route to major wealth creation. They have probably created some wealth before considering a purchase.  These are, by definition, discretionary purchases and as long as purchasers have confidence that the underlying value of their asset will not diminish over time then they should not fear ‘jumping in’. In fact, short term market jitters could provide opportunity for buyers in extracting better terms from vendors.

We don’t like short termism. It distorts what should be perfectly rational long term investment decisions disproportionately and goes against the grain of history. The property market for international buyers of homes in the Cote d’Azur and beyond has been marching on since John Taylor set up the first ‘English’ estate agency in 1864. Since then there have been some major world events, (two world wars to mention a couple), that completely dwarf the debate on whether the UK should or should not be in the EU. None of these events has, over the long term, diminished the appeal and underlying value that the south of France and more recently the Alps, offer.

If you have had a long held ambition to own your own corner of France you should not let the current furore around potential Brexit dissuade you. History is on your side.

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