Thinking about investing in a property in the French Alps, but not sure which loan you can and should take? Are you interested to see how Brexit might impact the purchase of a property in the French Alps? You’re not the only one!
We know these are frequently asked questions amongst first-time investors, especially those who are not French natives. So, we’ve teamed up with our expert partners to find out more about investment property and loans in the French Alps. Read on to see what they have to say…
In this article, we’ll be hearing from our trusted partners…
What are the different types of loans available for buyers?
Gareth Jefferies
-Alpine Property
“French clients will usually use a local bank and if they need a mortgage it will be a fixed rate. However, they are less likely to need a mortgage. This will usually be a cash purchase.
Of the Brits that are looking, about 30% currently take a loan. Only 20% actually need it though. That other 10% could buy cash but are attracted by the low interest rates.
Since Brexit, finding someone willing to make the loan has become harder. Not impossible, but harder. We would advise approaching a broker.”
Sarah Watts
-Alpihome
“I tend to recommend BNP Paribas international buyers. They specialise in Non residents so are perfect for our overseas clients.
For clients such as American based ones, who traditional banks will not lend to, I would suggest a specialist broker.
For French clients, they tend to go to their local branch or will do the rounds of the banks themselves so I don’t normally offer much advice.
The Swiss too have access to some low rate mortgages so they often finance with Swiss banks.”
Mien Krooglik
– Nexalia
“We are finding that certain banks in France are still lending to non residents and on favourable terms. The applicant will need to go through a strict lending criteria however can then benefit on the low interest rates that we are currently seeing. Over the years we have formed a strong network of both national and local banks that we recommend depending on the client profile.“
Do the same buyers look at apartments and chalets or do they mainly stick to one of the other?
Gareth Jefferies
-Alpine Property
“One or the other. And also they split into “all year round” and “just ski”, the all year round people are in the ascendance, and they look for outside space – which leads them to chalets and out of town.“
The typical buyer has around 200-350K to spend on a 2 bedroom apartment in the French Alps. Those with a 500-600K budget might be open to an apartment set up, but it tends not to be a traditional one in a building with a balcony and 4/5 bedrooms, but rather something like a ‘demi farm’ which is classed as a ‘coproperty/apartment’ but feels more like an individual home.“
Mien Krooglik
– Nexalia
“A few years ago, there was a distinct line with regards to buyers’ requirements. They either wanted a chalet OR they wanted an apartment. These days we have adapted our construction designs keeping in mind the buyer trends and requirements.
We are designing apartments which are adapted to each individual buyer for both personal usage as well as rental. Therefore we are now seeing buyers now considering both.”
Has the English market been impacted since Brexit?
Gareth Jefferies
-Alpine Property
“Very much so. Our sales to the UK market have halved, to the French they have trebled. We expect some bounce back, and in fact, there are plenty of reservations for viewings in the upcoming autumn holidays.”
But Brexit is nibbling away at the demand. Not being able to spend more than 90 days in a year is one thing, the difficulty of retiring to France another, the difficulty of working in France, another, the reduction in the number of available mortgages….the list goes on. They are all nibbling away at demand from the UK.
Some things in favour – wanting to get away from a country that some people are feeling disappointed by. A slow increase in the value of the pound. Some people have benefited from COVID and have money to spend.”
Sarah Watts
-Alpihome
“Initially, there was a flurry of buyers trying to settle before the final cut-off Brexit deadline, since then it’s been more the fact the British residents couldn’t travel that had the impact on buyers and sellers. British clients still want to buy something in the mountains, so interest is not lacking.
A few sellers have discovered the downside of Brexit which is twofold: one, British clients can no longer reduce the social charges part of the Capital gains tax calculations by proving they are affiliated to a European health scheme in another country. And, they have to appoint a fiscal representative to do their capital gains declaration whether there is any to pay or not, which can cost several thousands of Euros.
It’s, therefore, become less profitable when selling. Other than that interest and demand is still high.”
Mien Krooglik
– Nexalia
“Not at all. Brexit has worked as a catalyst for British people who want to keep a piece of Europe, as well as invest in a different currency.”
What proportion of buyers buy to rent?
Sarah Watts
-Alpihome
-Alpihome
“A few clients will buy for their own use exclusively but nearly everyone, say 80-90%, will rent at least a few weeks to cover running costs. About half of the buyers, buy to rent more seriously and are concerned with rental incomes and returns.”
Mien Krooglik
– Nexalia
“Again, this has slightly changed since covid arrived. We are finding a slight increase in clients buying for sole usage as they plan to use their ski home more often (weekends, holidays etc).
Saying that, we still have over 85% of our clients who rent out their property as the income is attractive, especially now the summer and shoulder seasons are becoming more popular in the Alps with more activities offered for the whole family.
These ski homes can be a working investment as well as offering the owners a base in the mountains they can enjoy without restrictions.”
So, there’s an introduction to investment property and loans in the French Alps. If you’re looking at an investment property in the French Alps to rent, then take a look at our properties for sale page, as well as our rental calculator to see how much you could earn.
