Rock bottom French rates take the hit out of Brexit currency swings5th July 2016
Rock bottom French rates take the hit out of Brexit currency swings
While uncertainty in the wake of Brexit caused waves across the currency market, the pound’s increasing resilience this week indicates a quiet confidence in the market that for now, its business as usual. For investors in French property, a further drop in mortgage rates to a historic low has undercut the recent currency swings, making it one of the most attractive times to lock in long-term value in the French property market.
Fixed 20 year rates now range from 2.15% nationally and as low as 1.55% in Paris, placing British buyers in an equally favorable position as they were one year ago, when the pound sat high against the Euro.
According to John Luke Busby, Private Clients Director of mortgage specialist French Private Finance, ““Last week's shock referendum announcement coincided with a further drop for French mortgage rates to all time historic lows. These ultra low long term fixed rates have in effect nullified the changes in exchange rates for British buyers and offer the opportunity to lock in long term value.”
“The market remains positive, and we are even noticing a rebound in prices in Paris and increasing interest from investors, particularly USD investors for who the Euro has become substantially cheaper and they can benefit from the double whammy of a strong currency and ultra low interest rates.”
For UK buyers, even if the UK were to leave Europe, taxation and mortgage treaties with France remain independent from the EU, which provides a strong foundation for investor security. “Overall, there seems to be a quiet confidence emerging around the future of the UK economy, whatever the result of the negotiations in Brussels or the UK Parliament. Some kind of deal is inevitable given the importance of our Service industry and The City, which make up 80% of the UK GDP. The British economy, it seems can look forward to a bright future either within or working closely with the EU.