The Snow is Still Falling, But What About the French Mortgage Rates?
International Private Finance (IPF) is the UK’s leading French mortgage broker for non-residents. Here are their top 5 predictions for the 2018 Alpine property and mortgage market:
1. Alpine property purchases by British buyers will continue to rise in 2018
Despite the ongoing Brexit negotiations, IPF saw a bumper year in 2017 with more mortgages taken out plus a higher average loan size for British buyers. We predict that alpine property sales, with French mortgages, will continue to increase throughout 2018. Ski resorts in the French Alps are some of the most sought-after locations for international buyers - and property prices look to remain reasonably stable in 2018 - with FNAIM (the professional body for French estate agents) forecasting property price rises of 2%.
One in three of the French mortgages arranged by IPF in 2017 was for a property in the French Alps, showing that the region’s allure remains strong. This winter’s fantastic snowfall will have only improved the appeal of this area – and more and more owners are getting to know the charm of the Alps in the summer months.
2. Brexit is likely to push more buyers to buy now, rather than later
Emmanuel Macron’s presidency was a welcome event for international buyers and borrowers, bringing stability and confidence to the alpine property market after a rollercoaster 18 months post-Brexit and the election of Donald Trump. The joint announcement by Jean-Claude Juncker and Theresa May at the end of last year guaranteeing residency rights for UK citizens in the EU after 2019 has also reassured those buyers looking to move permanently to France. This, alongside the rather gloomy predictions for the London property market, means many of our international clients choose to buy in the French Alps rather than invest in the UK.
3. Buyers will buy with a French (Euro) mortgage, rather than use their Sterling savings
Another trend we believe will continue is a move away from buying a second home “in cash”. In 2017, savvy British buyers realised it was better to keep their Sterling savings liquid, and instead, borrow in Euros, taking advantage of historic low French mortgage rates. With low, or no, early repayment charges, these buyers have basically decided to ‘wait it out’ (comfortably, in their new alpine home!) until Sterling strengthens before paying off their mortgage. One of our clients, who took this approach for a property purchase in Chamonix, was recently featured in the Sunday Times.
4. French Mortgages rates will increase, but so will the range of mortgage products available
Fiona Watts, IPF’s Managing Director, recently discussed interest rates with our wide panel of lenders. Their general view is that French mortgage rates will increase in 2018, but at a very slow and gentle pace. With French mortgage rates currently as low 1.5% for non-residents with Retail banks and 1% with Private Banks, the borrowing climate still favours buyers, but the best deals currently available are worth securing.
The French banks also indicated that in 2018, due to the demand from international buyers for French property, they will increase their LTV limits (currently 80-85% depending on the client) and introduce new mortgage products.
5. Clients must protect their interests
Finally, a word of warning: 2018 is the year of regulation – with GDPR (General Data Protection Regulation) coming into force and the European Mortgage Directive in play. British buyers need to be aware that by approaching French lenders directly they won’t deal with an advisor with the UK-recognised mortgage qualification (CeMap) nor will they benefit from FCA protection. IPF’s mortgage consultants are all fully-qualified to give mortgage advice and IPF is FCA registered. As a consumer, borrowers are protected, with recourse to the Financial Ombudsman and UK law courts. We know some clients have previously lost out on properties, because the local bank has initially promised a mortgage but then withdraw the original offer during the purchase.
Contact a French Mortgage Broker Expert TODAY
IPF have a specialist, bi-lingual team, expert in the differing criteria of French lenders. We can give you a personalised French mortgage quote in minutes, so you get in touch and make sure you don’t lose out on your Alpine property dream!
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Find out how to get a mortgage in the French, Swiss, Austrian or Italian Alps.
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Know what lies ahead with the purchase process our buying guides to property in Switzerland, France, Austria & Italy.