is it s stupid move to buy in France?

indigoo

Can anyone offer some advice? With the £ as it is at the moment, is it a stupid move to buy a holiday home in a ski resort in France?

dannyboycey

If you can comfortably afford it, getting out of the UK sounds like a great idea. The UK has gone down the pan.

arabianights

£ could get a lot worse I'm afraid...

indigoo

Bump up my post

devils_advocate

indigoo wrote: »

Can anyone offer some advice? With the £ as it is at the moment, is it a stupid move to buy a holiday home in a ski resort in France?

You need to give more info. If you don't like skiing, its probably stupid. If the money to buy it is kept in a biscuit tin on the mantlepice, its probably less stupid.

If however you want a combined punt on

- GBP / EUR FX rate
- French house prices
- French rental prices
- The ability of French/ Germans/Brits to spend money on ski holidays,

there are probably other ways to reduce the combination of risks if this is what you want.

indigoo

Yes we are definitely a skiing family and would like to rent out when we are not using the property, making money isn’t the main agenda, but I am concerned about making a purchase at the wrong time if it’s better to wait until the £ is stronger. This is all a bit new and I’m not sure I completely understand your answer. Would be grateful of a little guidance.

Can type can’t spell!

indigoo

perhaps can't type, not sure where all that font stuff has come from

ManAtHome

To expand a bit on DA's points

Exchange rates - I think the Euro is over-valued... BUT euroland seem to have a much more consistent economic policy. Almost anything could happen in poundland (like borrowing £2.7 billion to try bribe the punters), so you can't really apply logic or economics - verdict, flip a coin.

French house prices - probably not a concern as you're not in it for the capital appreciation... BUT do you plan to retire there, flog it on later, keep it for a very long time before flogging?

French rental market - probbaly tied in with #4, whether prospective punters are going to be better off or worse off for the next few years. My bet is worse off - whether that is short-term, medium-term or long-term depends on how the politicians handle things/panic.

Another consideration is how much it's going to cost compared with a few package hols each year. I don't ski, so no idea of prices, but I do have a lot of hols in sunnier spots for less than it would cost me in interest on a 'place in the sun'...

devils_advocate

indigoo wrote: »

Yes we are definitely a skiing family and would like to rent out when we are not using the property, making money isn’t the main agenda, but I am concerned about making a purchase at the wrong time if it’s better to wait until the £ is stronger. This is all a bit new and I’m not sure I completely understand your answer. Would be grateful of a little guidance.

Can type can’t spell!

What I was trying to say in an abbreviated way is that any decision should be based on your assessment of risk factors.In general, if one or more of the risks are too high for your taste, don't do it. The biggest danfger is that if you do it, you may get hit by arisk factor you hadn't thought about.

For example, I thought at this this time last year that the major risk to uk house pices was interst rates rising because of the global economic pressures, If I'd hedged this risk, I would still have been hit by the drying up of seecuritisation markets, which I didn't forsee.

My forst post was an attempt to split the risks in constituent parts, so you can evaluate them. IOf you don't understand anything about that risk, its probably better not to take it on.

So if you ask yourself the question "how much of the capital value can I afford to lose?" and answer 25%, Then you have to say "do I think it possible that the sterling can depreciate against the euro by more than 25%?" and you answer "yes, because it already fell by 21% in an eight month period in the last year." This should tell you that there is a very real possibility of an unacceptable loss, just on one factor.

You have to weigh the other factors too, and than also combine them. So you ask yourself the question "Could there be a 13 % fall in the value of sterling and a fall of 13% in french house prices? If the answer is 'don't know' to the frensch house price question, I'd venture to suggest that this risk is unacceptable, as you're paying over money and you don't know what will happen to the value of the underlying asset.

And so it goes on. Hope this helps.

puddy

what about the tax and inheritance issues, you need to calculate all of that in i think, french taxation is quite high i read....

Generali

Don't buy a holiday home with the aim of making money. If you want an investment, go out there and find the best investment you can. If you want a holiday home, find the best holiday home in your price range.

If your holiday home happens to make you a few bob as well then so much the better but don't confuse the 2.