In terms of enquiries, they are steadily coming in, as normal. When the campaign began we found that there was a temporary lull in British enquiries, but that quickly stabilised with the level of enquiries returning to normal. Buyers are also viewing, making offers and sales are completing at a normal rate. Buyers are negotiating as strongly as ever and vendors are keeping their cool. The rules of the game are take your time and be prepared to be flexible over price and means of payment.
Priced at 245000€: the owners will negotiate on the price of both the property and the furniture for this lovely Charentaise farmhouse.
Where the challenge does lie however, is with the currency markets as exchange rates are volatile and are largely reflecting what opinion polls are forecasting regarding the result of the referendum vote. The markets quickly took the view that should the vote go in favour of Brexit then the pound would fall sharply (figures of between 10% and 20% have been suggested by some). Inevitably exchange rates have moved in anticipation of this as as the Brexit vote has appeared to be moving ahead in the polls and some of the the anticipated fall has already been built into the current exchange rate. Markets are not always right, however, either in forecasting the results of the vote or in forecasting the direction in which exchange rates will travel.
My own view is that we are in unpredictable territory. As far as the property market is concerned, it is clear that British buyers are aware that a lower pound means their budget for a French property is LESS. On the other hand, if a vendor is exporting the funds received from a house sale back to the UK they could be realising MORE than they had originally budgeted for – you can see that there will inevitably be some sort of trade off if a deal is to be reached between buyer and seller.
For example, if you are moving money back to the UK then of course a low exchange rate is good news and 300000€ realised from a sale on January 1st would have bought £220 000 while on April 11th it would have achieved £243 000; a difference of over 10%. The opposite argument is the case if you are moving money from the UK to buy in France.
Because of this the currency exchange houses are working overtime trying to persuade people to take advice when moving large amounts of money from one currency to another. Timing is everything and in many cases you can use quite sophisticated mechanisms to forward purchase or spot purchase funds and achieve the best deal possible for you.
French Properties Direct are not currency dealers, so for a better explanation you could do a lot worse than have a look at the brochure which Smart Currency Exchange has produced for people moving back to the UK and then have a chat with them. If you are not moving back to the UK but are going elsewhere outside of the Eurozone then the principles they outline still apply. Please get in touch with us if you would like a copy of the brochure.
Selling to move back to the UK - could you transact in the same currency?
The other alternative is to handle the transaction in, say, Sterling rather than euros, which will avoid changing currencies and give both parties a degree of certainty. This is not common practice, but it can and does happen and your notaire should be familiar with the mechanics of the transaction. The principle is that the notaire will require the buyer to pay their 10% deposit in euros (this ensures that the notaire and the French Government get their fees and taxes) but the balance can be paid into an escrow account in the UK. This is held by a UK solicitor who is known to the notaire and only when they guarantee to the notaire that the funds are safely lodged in the account can the sale complete. As ever, there is an additional charge for the service. It may be worth discussing the possibility of selling by this method with your notaire if you think it could help you seal a sale.