Brexit and Covid-19 have provided some challenging conditions for the French property market. But agents and buyers have adapted to the “new normal” – agents changing processes and procedures and buyers reassessing what is important to them.
At the beginning of the year, the French property market had been flying, with high-end properties leading the way and records sales in many regions. Overseas as well as local buyers were attracted by relatively easy finance and low interest rates. Then when France went into a total lockdown and quarantine rules, sales dramatically dropped. And like so many industries there was a shift of activity to online, with estate agents seeing increases in website traffic. People suddenly had more free time to research properties, which now could only happen online.
To continue working within the lockdown rules, estate agents changed the way they worked, adding video conference calls and live video walkthroughs as well as updating their property listings to include more detailed information, floorplans and virtual tours. Notaires similarly adapted to the “new normal”, replacing face-to-face meeting with Zoom video meetings and esigned documents. The new processes have fuelled the growth in unseen (property not visited) purchases, and there has been a significant increase in online enquiries received by many estate agents. French economists believe that since cannot be lowered any further, property prices could fall by at least 10% by the end of 2020.
As with many countries in Europe, lockdown for people living in major cities was not a particularly good experience. The result has been a growth in demand for more rural locations from the local market as people re-evaluate the various elements of their work-life balance. Other factors include city dwellers purchasing boltholes in the event of future lockdowns and making investments in property to protect savings during these turbulent times for the financial markets.
Similarly, for Brits, accessibility from the UK has become a more important consideration, with the north and west of France rising in popularity – areas easily accessible by car from the UK. However, the core benefits of affordable price and lifestyle will ensure France will continue to be a favourite for UK property buyers.
The impact of Brexit transition period ending 31 December 2020, has been one of the factors powering the demand from UK of French property despite Covid-19. From 1 January 2021, UK passport holders will no longer be classed as Europeans. The new classification will be Third Country Nationals, resulting in increased requirements for Brits, such as residency applications and restrictions on the length of stay if you choose not to apply for residency in France. Other factors such as access to healthcare systems and tax rules will also come into play as the details of Brexit continue to get ironed out.
Very high-end properties (€5m+) are likely to continue to increase in value. Upper-market properties (€3m – €5m) may see some price reductions as most owners in this category have sufficient resources to weather the impact of Covid-19. Properties below €3m (Mid to low) depending on the region are likely to see lower prices – properties commonly owned by the elderly and/or have a reliance on holiday rental income or personally have had an income source significantly disrupted by Covid-19.
While Brexit and Covid-19 are likely to dent demand, France will continue to be one of the most popular overseas property destinations for Brits. Some regions may see a fall in demand from Brits, as post Brexit they will only be able to spend a maximum of 90 days in France without residency. Travel durations within 2 – 3 hours by car, as opposed to a flight is likely to be pre-requisite when buying a property in France due to Brexit and Covid-19.
We hope you have found the information above useful. If you have any questions or need assistance finding a trusted professional to help you with your overseas property purchase, please do not hesitate in contacting the team at Overseas Property Forum on +44 (0)330 0575 990 or email email@example.com.