|
|
|
|
Sterling Advice Even though many readers will live here in France, undoubtedly a large proportion of us still have some assets in good old £s and tend to keep a quiet eye on currency exchange rates. What impact does the movement of currency have and how much has Sterling fluctuated against the € during the past year? Well, to answer the last question first, Sterling has moved within a range of roughly 1.37 to 1.52, a range of 11%. Bad enough if you had started to enjoy an income from the UK when the £ was at 1.52, but certainly not good news if you are looking to buy at the moment and your money is still in £s. Even worse news is that the currency experts are predicting that the £ will fall still further during 2005. So, returning to the first question, what impact does this have - well, it certainly pushes prices up for UK buyers, and will probably cool the market down here a little. We are seeing evidence of some properties with prices being over-inflated, and the consequence is that they remain for sale months later. Generally, it is not the vendor or the estate agent that sets the selling price, it is in reality the market. To generalise, the properties at the lower end of the market are still increasing steadily, but the biggest headache seems to be emerging higher up the property ladder with gite complexes that have been overdeveloped and are now looking to sell. As anyone will be aware, there is tremendous competition in the gite market and always the inherent danger of over supply. You really need a unique selling point to make your property stand out from the other in today’s market. The same principal applies when you come to sell. Almost on a daily basis now, we are seeing new gite properties becoming available for sale, especially on private websites. The potential buyer should beware - how has the price been calculated? Why are the owners selling? When we talk to clients who are searching for gites, we ask them whether they have considered buying a main residence for themselves and a second property for the letting business. When the time comes to sell up for whatever reason, this option means that you don’t have to move lock stock and barrel. Yes you will have to pay Capital Gains Tax, but you could potentially if everything is on a single site anyway, as there is no way you could insist to the taxman that everything is your main residence! There is still a market for gites, and they provide a rewarding life-style and generous income for owners. But there are always alternative ways of generating an income. We started to look at “Leaseback schemes” for clients during the middle of this year. These schemes provide guaranteed rental income levels and are managed for you, whilst producing a typical income of between 4.5 and 5%. Currently, we are putting together a portfolio for 2005, including a top of the range option at Cap d’Agde, on its own island and having mooring rights etc. The market overall has been brisk during 2004. We
have seen our level of sales rise and prices have continued an upward
trend. BUT, without question, there has been a marked tail off during
Q4 this year, something we have not evidenced before. In the UK vendors
are reporting chains collapsing, (nothing new I know), and property
taking longer to sell. All of which is leading to a slow down in the
market here. May I take this opportunity to wish all readers “Joyeaux Noel et Bonne Année pour 2005”. |
