The possible consequences of Brexit on British investment in France

The United Kingdom’s undefined exit from the European Union still has
unknown consequences in terms of real estate investment. How will British
investment in France evolve with Brexit? Here are some suggestions of what’s to
come.

Diversify your investments more than ever

Investors concerned by the exit of the United Kingdom from the European Union
will not – in the majority of cases – wait for the debated arrival of Brexit. The vote
on leaving the UK has taken place, and a change in mentality is still evolving. The
work towards a separation with Europe is pushing investors to further optimize
their diversification. If a proposed second home purchase or rental was underway,
it may be shifted to another investment (shares, bonds or other assets). But the
investments will still continue.

Although real estate remains at the heart of their strategy, investors will pick
the location of their purchase with greater care to better spread their risks.
They may decide on an investment in Europe or further away, in the United States,
Asia or North Africa. In the end, the goal is that this new investment holds and
ideally increases its value. So the key word is diversification. Long-term asset
valuation is a concern for investors in this time of Brexit, but this is far from
new.

Securing the investment in these Brexit times

British investors considering a purchase in France are looking for signs of
reassurance. Fortunately, in this context of Brexit, there are some :

  • Mortgage rates are extremely low. These favorable conditions, below the
    rate of inflation, cannot be maintained. Borrowing today, or in the medium
    term, allows you to take advantage of this market by reducing the total
    cost. Even if the value of an asset becomes lower, its cost remains controlled
    thanks to the low rates;
  • Low and fixed rates over the life of the loan are available. There is no
    need for variable rates and additional risk-taking to get a low rate.
  • To reduce the risk of loss, and optimize a real estate investment, many
    investors choose to buy a property that will be rented. Rental income will
    offset a possible depreciation of the property and ensures the investment
    remains profitable;
  • In France, the construction market is on the up. A number of new builds are
    springing up in big cities and their surrounding areas. This construction
    market leaves room for non-resident buyers;
  • France is a country with a strong economy and rules which protect buyers,
    which gives investors a reassuring financial environment. As well, France is
    often ranked the top travel and cultural destination in the world.

The uncertainty Brexit presents concerning the pound sterling and the economic
future of the UK may stop most British in their tracks, but investment in France
should not be concerned by this excess of caution, on the contrary it should prove
popular with the Brits. More to follow in 2019…