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Expat Investor : January February 2009
PROPERTY INVESTMENT Former French distillery development launches in time with increased flights to region French developer, Garrigae Resorts, specialists in renovating historic buildings into stylish residential developments, has launched the ‘Distillerie des Templiers Retreat & Spa’ in Pézenas, South of France. This development will see the conversion of the town’s old distillery into a luxury retreat and selling freehold apartments in this renaissance market town. The launch coincides with another launch – that of Ryanair flights from London (Luton) to the Languedoc airport of Béziers Cap d’Agde, just 26 km/28 minutes drive from Distillerie Des Templiers. The region attracts 1.2 million tourists per year who are attracted by the medieval villages, warm climate, colourful festivals and uncrowded beaches. The new route brings the number of Languedoc airports with direct UK connections to five: Béziers, Carcassonne, Perpignan, Nîmes, and regional capital Montpellier – all of which have flight times of less than two hours from the UK. The studio, one and two bedroom apartments at La Distillerie will be in keeping with the local period architecture and come fully furnished to the highest standard. Garriagae confirms that quality and attention to detail will be found in every room, from the character bathroom fixtures to the stylishly equipped kitchens. Apartments will be generously proportioned, with interiors designed in wrought iron and local stone, with fabrics and finishes in warm Mediterranean hues. Pézenas is a popular destination with UK and Irish buyers, who enjoy the hub of activity and vibrant social scene the town provides for this pretty rural region. Garrigae’s President, Miguel Espada, says, “We have already had great pleasure introducing buyers from the UK and Ireland to this beautiful part of the South of France through our popular vineyard and chateau resort developments and are now anticipating strong demand from buyers wishing to own in this authentically ‘French feel’, prime location.” Amenities will include a large outdoor swimming pool, lounge area, Mediterranean gardens, wine bar and a gourmet brasserie. At the heart of the development will be a wellness spa offering organic treatments around a peaceful courtyard with olive trees and a fountain. A piano bar, rooftop cocktail terrace and comprehensive guest services will add to the attraction for owners and guests alike. All of these amenities will be managed by Garrigae, who confirm the company is involved in the development for the longevity. Distillerie Des Templiers is being launched off-plan and through the government leaseback and tax exemption scheme, with guaranteed rental returns over a 20 year period. There is a guaranteed rental income of up to 4.76% (gross), if owners are not using the property themselves or, alternatively, they can chose to take a smaller return and use their property for up to six months a year – a welcome assurance for property buyers in today’s economic climate, looking for a guaranteed return on investment. An additional benefit of buying a freehold property at any of Professional landlords increase dominance occasional investors or new entrants to the market. In the three months to the end of September, intermediaries said that over half (55%) of buy-to-let business conducted was for remortgages, with 30% from landlords looking to extend their portfolios. Just 2.6% of business was for property substitution. First-time landlords accounted for 10.6% of business during the period, down from 18.3% in the third quarter of 2007. Financial advisers believe that Professional landlords continue to increase their dominance of the buy-to-let sector, according to research from Paragon Mortgages.A panel-based survey of 200 mortgage brokers reveals the proportion of landlords either applying for portfolio extension mortgages or remortgages continued to grow in the latter quarter of last year. Meanwhile, the number of first- time landlords applying for buy-to- let mortgages fell to its lowest level Chancellor must suspend stamp duty The National Association of Estate Agents (NAEA) has called upon the UK government to help thousands of young people currently priced out of the housing market. Chris Wood, President- Elect of the NAEA, says, “The Chancellor must realise that the housing market is not a piggy bank for his personal use – the gravy train is over and stamp duty cannot be used irresponsibly to boost his coffers. “The bill for first time buyers has more than doubled in the last five years, making it impossible for many young people to start their own home. As it stands, stamp duty is a tax on aspiration – disappointing during an economic boom but unforgiveable in a faltering economy. “We have made repeated calls for a full revision of stamp duty, and the stakes have never been higher. The Chancellor must take this opportunity to give the housing market the boost it needs. “We now call on the Government to suspend stamp duty and hold a full review into making the system work better for the consumer. That is a discussion at which NAEA would be very happy to sit at the table.” The National Association of Estate Agents (NAEA), the residential sales arm of the National Federation of Property Professionals (NFOPP), is the UK’s leading professional body for estate agency personnel, representing the interests of around 10,000 members who practice across all aspects of property services both in the UK and overseas. since the question was introduced into Paragon’s FACT survey in 2001. This suggests that growth in the buy-to-let market is being driven by experienced landlords building long- term portfolios rather than the proportion of buy-to-let business they deal with will remain fairly steady during the final quarter of the year, with advisers expecting an average of 1.7% less buy-to-let business than the third quarter. Of those that do expect buy-to- let business to grow, 63% said the main driver would be professional landlords picking up opportunistic Garrigae’s resorts is the introduction of the ‘Resort Owner’s Scheme’ which allows freehold owners to swap their usage time to stay at any of the five other Garrigae resorts. This will soon include Garrigae’s ski-in/ski-out development in The Four Valleys, Switzerland. Construction of the Distillerie Des Templiers commences in the Spring, and completion is anticipated for the second quarter of 2011. Prices, including furniture, start from €170,000 for a studio apartment to €490,000 for a two- bedroom apartment with jacuzzi. Fast Facts 22420 property. John Heron, managing director of Paragon Mortgages, says, “The number of first-time landlords entering the market is at its lowest level and perhaps that is a good thing in the current economic environment. “Landlords with experience of the private rented sector are well positioned to take advantage of current conditions, particularly with rising levels of current demand. As these landlords are typically lowly geared, they are also in a strong position to pick up property at bargain prices when they spot the opportunity. “Professional landlords represent the core of the buy-to-let market – they are the investors that base their purchase decisions on proven levels of tenant demand for long- term returns rather than speculative investment for a quick profit.” Fast Facts 22421 SVR survey reveals discrepancies Around one in ten current mortgage borrowers are on their lender’s standard variable rate (SVR). Some are as a result of having a small mortgage, while others who have come to the end of an existing deal may not have had enough equity in their home to find any alternative. For those borrowers who have been on an SVR throughout the last 12 months, the amount that they would have paid in mortgage repayments over that period could have differed considerably, depending on who their lender is. Based on a £150K mortgage, MoneyFacts’ tables below show which lenders’ SVRs would have worked out to have been the lowest or highest in terms of annual capital and interest repayments, taking into account any changes each lender made to its SVR over the last year. Michelle Slade, analyst at Moneyfacts.co.uk, comments on this survey, “For some borrowers, SVR is their only option. The majority will remain on their current lender’s LOWEST REPAYMENTS Stafford Railway BS First Direct ING Direct (UK) Harpenden BS Holmesdale BS HSBC Source: Moneyfacts.co.uk 11.11.08 HIGHEST REPAYMENTS Birmingham Midshire Solutions £11,532.95 Ulster Bank (NI) Darlington BS Kent Reliance BS Northern Rock Bank of Scotland Mortgages Source: Moneyfacts.co.uk 11.11.08 £11,454.18 £11,417.50 £11,415.74 £11,396.68 £11,367.21 5.44% 5.42% 7.17% 7.59% 5.84% 5.35% January/February 2009 ? EXPAT INVESTOR 23 SVR, but they could have found themselves £2,176 worse off than if they had switched to a similar deal with a competitor. £9,221.07 £9,254.00 £9,483.98 £9,532.95 £9,732.95 5.99% 5.50% 6.34% 6.19% 6.14% £9,754.10 6.25%
March April 2009