Hello and welcome to a home abroad buying a dream home in Europe. I'm Kathy Hawker, a property journalist writing for titles including The Sunday Times and the Evening Standard. And in the course of my work, I speak to many people considering buying a home abroad, hearing the questions they have. For example, what's the current state of play in the European market? What are the locations and property styles that will deliver the lifestyle they want, and what are the key financial and legal practicalities to keep in mind? Today's webinar aims to address these issues with the help of Knight Frank's property and finance experts. They include Mark Harvey, Head of International Residential, and Nicola Christinger from the International sales team, both of whom have extensive experience of living and working in continental Europe. But to start, Kate Everett Allen, global Head of International Research, provides a European wide overview of current market themes. Thanks Kathy. So in terms of what people are looking to buy and why, in periods of economic uncertainty, we often see a flight to quality both in terms of location and specification. And that's a trend that we're certainly noticing at the moment. So core markets with the best amenities and transport links are often those that are more protected from price corrections. So in Spain and the Balearic Islands, the stalwarts are usually places like Marbella, Barcelona, Palma and Majorca and Ibiza's South Coast. In Italy it's Florence, Lucca and the Italian Lakes, whilst in France it's places like Can and Cap Don T they're all established perennial favorites. And the appetite for second homes has certainly increased. So Knight Frank's Global Buyer Survey found 33% of those polled during the pandemic said they were more likely to purchase a second home due to the restrictions that they experienced during COVID-19. In terms of why people are buying around 30% tellers, they're seeking capital appreciation. But the challenge they face is that the number of locations registering price growth is starting to deplete. Given the changing economic landscape and higher mortgage costs, instead buyers are diversifying. They're looking to spread risk, perhaps considering two or even 3 second homes with smaller price tags across multiple markets, or considering homes that generate an additional income. So from vineyards to olive oil agritourism, the list is extensive. In terms of how owners are using their homes differently today, we're seeing three key changes in the way that buyers use their second homes now compared to before the pandemic. Firstly, more usage. The mass transition to hybrid working due to the pandemic means people are spending longer time and making more frequent visits to their second homes. This appetite for Co primary living as we call it, means homeowners are now spending as much on their second homes, IT technology and leisure facilities. As they often do on their primary residence. Secondly, a greater focus on income. In an era of high inflation, it's no longer enough for property to just cover its costs. Owners now want a regular income from their second home and to maximize occupancy throughout the year. Thirdly, minimal hassle, so buyers want a AAA grade property that is complete and ready to move into. Few want to renovate given build costs remain high. And reliable builders, Few and far between. Buyers. Tellers. They want to make up for lost time and be able to use their property from day one in terms of what questions clients are asking. Will clients want data, hard numbers and market intelligence? They want to be able to make an informed decision, so they come to the research team here at Knight Frank to gauge current market conditions. Top of mind for many is what direction prices are moving in, so we hold data for most markets for the last 10 or 20 years so we can provide that market knowledge. Levels of new supplies Another question so limited new construction can cushion the price of existing homes in uncertain economic times. Buyers also want to understand the restrictions on who can buy and rent and how property taxes compare. Clients also want to know which nationalities by where the savvy buyer will prioritize those markets with a high degree of liquidity and a diverse buyer mix to future protect the exit strategy for those non EU residents wanting to spend more than the 90 out of every 180 days the changing visa landscapes. So the halting of some golden visas, the expansion of digital nomad visas is another hot topic and one that we can assist with. But often it's worth understanding why the client is buying. Is it a second home, a Co primary, a retirement home or a rental investment? This will ultimately shape the questions the client needs answers to and the insight that we can provide. Thanks, Kate. We're joined now by Mark and Nicola. And to start the discussion, let's take Kate's first point, the importance of location and the flight to quality. Mark, what are your clients? Interested in what are the locations that they are focusing on. It is all about quality Kathy. I think it's fair to say that you know the the kind of perennial favorites remain really top of the shopping list if I can put it that way. You know, think Algarve, think sort of comporter, think ballyerics, Majorca beta, think Southern Spain, South of France, Tuscany you know. Sort of quality never goes out of fashion if I can put it that way. And I think people these are areas that are incredibly international They they they're absolutely set up to deal with foreign ownership. They provide a very liquid and relatively safe return over time and of course and that's believe the the lifestyle that everybody's looking for the lifestyle of. Well, a lifestyle, a Mediterranean lifestyle, obviously, outdoorsy, sporty. I think it's fair to say that there's something for every generation, you know, from the grandparents down to the the grandchildren, everybody will be, will be happy and fulfilled. Yeah, for sure. And also very good access at international airports and transitions. Yeah. And Nicola, what's driving demand in your marketplace? I think when when people, when you have that initial conversation with people and they come to us first of all all for existing clients, you know that they say a general Provence. And it's it's just that the the lovely part of the discovery when you get to know those clients is just breaking down the different areas because the image of Provence in the South of France. You know, it is the square, it's the market, it's a typical type of of property. But actually I think you know that there are different places for everybody. So for me, I share my experiences of living in certain areas. So that will be the Alpi, which is villages like Sahmi de Provence, Mossan. Which is just South of Avignon, so that there's basically a big triangle in Provence. So you've got Avignon, you've got Arla and you've got the Luber home which is huge mountain. So I think if people don't know it, it's just discovering what works for them and what certain villages what's on in major cities or or Exxon, Provence for example, what's around there. And I and I think that drives then when when they understand a little bit more about. The the villages, the size of villages, you know how the infrastructure works and things like that, that that kind of will drive their journey as to where they end up understanding and learning and visiting and asking me questions. You know, everyone has their own agenda as to what they want out of the village and the town. So it's it's it's a big area but once they narrow it down, it doesn't. It doesn't feel quite so overwhelming what's on a typical a typical client's wish list. What do they come to you and say I want this, this, this. I think start off with the maximum wish list and then when you visit it will it will organically naturally change what's on it. Proximity to a village. I think more people would want to be closer to a village not all end up being closer to a village. They they probably will start off by saying they want to walk there. Again, that changes depending on you know, the property that they fall in love with. Their wish list is number of bedrooms. Not many people want a huge amount of land. Of course you know every client's needs are different, but the majority of people, nice house, 4-5 bedrooms, not a big upkeep, fairly low maintenance, nothing that requires too much work. Something, something that's easy something and something that feels home from home. I think again that's become something that that that's become apparent over the last year or so. And for us it's a little bit of a roller coaster. You know we go with with what the clients want and and and as their needs change and their wants change but definitely nowadays it's not something that they want to. I think of a massive project, it's something that's easy and ready to move into looking over the last. Two or three years post COVID, How has demand for these golden locations changed in in buyer's minds or has it? No, I I think it, I think if anything it's reaffirmed people's focus on the tried and tested you know in uncertain times or you know we've always found that there is a flight to safety and. And the and the flights of the tried and tested locations. You know, airlift is important. You know the ability to be able to get to a property within a reasonable time. Normally people want an our and a half Max from the airport for example. But the ability to rent it, the ability to accommodate multigenerations, the the family, as Nicholas says, not too much ownership hassle and and maintenance. I think it's important. A sense of belonging, authenticity, charm, all of these things. A lot of people want to immerse themselves into that sort of local culture bit from Spain, Italy. So you've got those buyers. The other buyers are the ones that are actually all about the weather, the lifestyle it offers, you know, and the amenities. So it could be got offers, beaches, sailing, all that sort of stuff. So really they can be anywhere, you know, there are plenty of destinations that might offer that type of clientele. And and how do they divide between city and coastal and countryside is if, you know, if you want a city, do you generally head towards Spain perhaps or I mean how does that play out? A city buyer is going to be someone who's got a particular affinity and there there'll be a hook, there'll be a reason why they want that city. So Paris, for example, there may be a a family link, there may be a a work requirements or it may just be a a trophy collector there, I said. He's looking for something really heritage you know stone clad buildings houseman era in a historic center near the same Paris is unusual because it was never touched during the war. So you've all of the buildings are spotless and you know as they were 200 years ago. You know, Madrid might present different lifestyle considerations and but mostly if it's a city by they tend to be more driven by investments and perhaps a pragmatic usage. Regularity through business et cetera, The ones that are looking for something away from a city of of predominately lifestyle driven, so family and et cetera, holidays et cetera and talking about the British love of the of the seaside generally coastline sailing, water sports, how are the what are the islands. That are top of the pups for your kind of pups. Well, you know the ballyerics remain up there very popular. Majorca of course with the Germans, with the Brits. We sort of fight for pole position there in terms of the ownership. Nice thing about Majorca and and and Ibiza for that matter is that you they're sort of mini Spain's. You know you've got a variety of typographies akin to the mainland you know from sort of wonderful kind of almond Groves, olive Groves, hilly escarpments. To beautiful beaches, craggy coastlines. So if you want the thinker or something else from modern on the coast, you can pretty much find it in these locations. All of that with the kind of Spanish rapper these are particularly popular people who love the sea and sailors and yosses, et cetera. Other locations I would say if I may Sicily, which is is has sort of really hit the sort of headlines of late. Which provides an incredible array of different, again, topographies and regions which would appeal to our clientele. The Greek Isles of course, and and perhaps Maltese archipelago while we're at it, there we go. But yes, island life is always going to be popular. The only downside the airlift tends to be there tends to be a little compromise that perhaps that a season. That's the perhaps 1 downside. And Nicola turning to France, what are the cities or major towns? Fires will gravitate towards. I think they will gravitate towards Avignon and the outskirts. I think they'll gravitate to Exxon, Provence for people moving their full time because of the schools, the international schools. But not everybody wants a big city. I think it's nice to have. I think it's nice to to be able to travel to maybe half an our, 45 minutes, even an our. They're prepared to go to, but as long as it's got a. A major town and and that is you know you're going to find those all all across the South. And how is the access for your buyers? Are they are they focused on specific airports or T GB stations? It varies. Some people don't like travelling by planes so the T GB is so fantastic it's so easy. Again it comes all the way down to Ave. then goes to X and then actually travels further along the coast. There's so many airports as well. There's small Ave. Ave. airport, there's NEEM, there's Montpellier. All of these serve the the, the full area of of of the southern, southern areas of Provence. So again, the choice is good. That's why people love it. And you know France has always been a love affair of the English it it has, there's there's no getting away from it. Love, no love, No, there is love. And I think it's because they're familiar with it, you know, they know a little bit, you know, we learned it at school. So there's, you know. Somewhere in the back of your mind, you know your your French school comes out and it's one of the things people say to us, you know why did you move there? What what what did you what what you there. And I think being able to share those sort of experiences because I did this and and and this doctor or that doctor or this restaurant or this lifestyle, you know that helps them, it's a comfort for them. So again in their decision making that sort of knowledge I think is something that. They they benefit from definitely. Where did you live in France? I lived in, I lived quite a few places actually. I lived in Sarami de Provence and I lived in Ning, which is a big Roman city. And again, people sort of you know that that they like that and they have one place in their mind that they want to go and they sort of identify with you, but it doesn't mean they're going to buy there. And again that's that's part of their journey. So one client was absolutely fixed that they only wanted to be in this one area. Just just in a tiny little village because they'd love that they'd come there on holiday. But again we couldn't find what he wanted so he ended up buying in a completely different part of Provence because he felt the same type of ambiance that he got in this place. So again it it doesn't matter that that all comes part of of open mind and so so Mark for your your clients looking Europe wide what are the. What What's the journey that you take them on? Do they start in one country and end up another? Are they absolutely set on Majorca or the Algarve? It's it's not, it's not uncommon to be honest. I think we've we've all had those those buyers who've had one sort of idea in mind and and we've ended up over a number of years, you know moving somewhere else. I mean, you know, obviously life evolves, you know, their families grow up, circumstances change. What was a favorable favorable tax jurisdiction is no longer a favorable tax jurisdiction. I've had, we've had all sorts, but I I suppose the the one that sticks in my mind most recently is, is 2 friends who run a business together and their families who are very close and they wanted to buy 2 houses side by side sort of more or less the same budget, So not too much. Much competition there, but they wanted it sort of new bill. They wanted something perfect which they could put their own stamp on. They wanted to be in an area that would suit their parents and their children as well. So and you think, well that's easy. But you know we I started offering obviously the whole of Europe all of our failure and we we went from Spain, we went to France. And we went to Greece and we ended up in Italy, bizarrely. And I say bizarrely because actually it was the the one place that didn't want to go. Yeah, that's it. Or at least they thought. But we found the perfect projects, the perfect location. And yeah, they're delighted. They've actually been quite, yes, faithful clients of ours and gone on to buy something and and they're still friends. They're still friends. We're pretty close. They've gone on to do quite a few things with us in the UK in particular. So having a holiday home next to your friend can definitely work out as well. Well, their business partners and friends, yes. Still, that's interesting, I think, because what's lovely for us is, you know, when people buy. And suddenly, you know, years later they'll they'll ring you and say hi Nicola, but you know we're looking to sell now and and so you start off on their journey and you continue their journey. So they'll, you know, selling for whatever reason, they've got older, you know, they want to move to a different location, they want to go back to the UK so, So you get them, you bought with them and then you sell with them. So that's a really nice aspect of it. So you have bought and sold the same same property three times. I've had clients that have bought and sold 3 * 3 different properties. Remember they just get GPI, don't know. Yeah, because they love it and they want bigger or smaller or upsizing. Downsizing area, rightsizing, exactly. I mean, typically the ownership might be 8 to 10 years on on average for a family and then they'll move on to another jurisdiction. Or The thing is, initially the kids are very much part of that equation and then eventually the kids don't come anymore and the house is too big and people don't use it. So machines kind of gone. So they start to look for something maybe smaller. A little bit more manageable elsewhere, 8 to 10 years. That's interesting. Yeah, that makes it sound really old three times. Let's move on to Kate's second point then about the type of type of property people are looking for these days and how they use it, the change and how they use it. The example, the desire for hassle free living somewhere where they're going to spend longer as you've said before than just a few weeks in the summer. What what are you seeing in the in the market Mark on that? The market changes so quickly. You know pre COVID everybody was very obsessed about running costs and you know wanted to justify ownership and and the gardener, the pool, the you know, the maintenance etcetera COVID that all was sort of cast aside and actually the focus was lifestyle. So people bought bigger, more space, costs were sort of you know, irrelevant. I think we've gone back to a more sort of pragmatic, more rational sort of thinking obviously in the situation we're in, standard of living constraints et cetera. So you know this changes very rapidly. So what what I'm seeing is greater pragmatism I suppose people are less keen on the kind of ramshackles dusty, you know, periods, you know, buildings that need considerable amount of work. Um, for obvious reasons, they're focused on more of a turnkey, hassle free, quite easy to manage property, UM, and often spilling into resorts or branded residences too, because that provides you with an additional comfort. Um, not only in terms of the value, but also the kind of. Management of the property and the rental that that's certainly what I'm finding. Yeah, I would. I would agree with Mark. I think long gone are the days now where people have this romantic idea of you know, when Peter Mail did his whole year in Provence, you know, getting the French builders in, I think people now are. Shying away from that, I think a property a bit of lick of paint, you know, maybe changing a bathroom, OK, but a full renovation with the building costs escalating Europe as in as in the UK, yeah. And the the challenges of doing it you know from from a different location is so in terms of resort living then how how is that affecting demand for resort homes across predominantly Spain I would imagine and Portugal, the key key location. Well, it's interesting because actually it's sort of leading to a whole new raft and. New wave of resorts being planned and coming to market actually I mean I'll name a few of course, but you know it's putting locations that perhaps wouldn't have been on someone's radar initially making them much more viable for example, Sicily, you know we we, there's been a lot of talk about Sicily recently through television channels and programs and what have you. And you know, you need to be quite brave to buy in a country where you don't speak the language, you don't understand the bureaucracy, perhaps the culture. I mean, obviously Sicily's got a bit of a reputation or hat, you know, a resort makes ownership in these places very simple. You know, you could be in any country in the world. But the key is you know none of the heavy lifting, none of the worry simply enjoy, enjoy the facilities of the hotel, the golf etcetera etcetera. And the key really over time is liquidity factor as well. So you're buying into a branded resort, it's giving you a certain value and and stamp which everybody across the world is going to understand. So which I think is important when you come to to reselling of course. But one of the other trends that Kate mentioned is the desire for rental returns owners looking to make their properties work a little bit harder when they're not there themselves. And is that something that you've seen in the market? Yes, definitely, I think people now have. Become more aware of how they can make the property work for them with social media on websites and and they're not scared of it anymore. You know, there's a lot of help out there. There's a lot of local help. Yeah, I I don't think it's it's anything that people don't think about now what's the what's the usual number of weeks that a property say in southern Spain could rent for in a in a average year. I mean Southern Spain, you've got you know sort of 48 weeks of sunshine a year. So I, you know if your personal use is is a couple of weeks, it's not sort of uncommon to to be able to rent it out for the rest of the the period. But the key is to stand out because obviously there's a lot of stock in those locations, great deal of build apartments, villas, you know what makes your property special. So going back to the resort, that might be one angle, but you know, think of the immunities, facilities around you, proximity to the beach, etcetera, security, these are important aspects that will help drive greater rental income. Yeah. So if you're, if you're talking to someone who's considering buying say in the next 8 months somewhere in Europe, what would your advice to them be on timing? Take your time, don't be rushed. I think is keep an open mind, Keep an open mind. Do your homework. Obviously you're not going out there blind. These places probably that you've been on a holiday to for many years. Perhaps there's a sort of childhood experience there somewhere. You know a lot of people will will prefer somewhere far-flung and exotic, others happy with a very sort of sleepy, as you said, sort of traditional village or or town. But take your time, do your homework, you know, the legals, the the, the tax, the ownership, you know, think about inheritance. And these are all the things that are quite boring. But actually you know, it's it's well worth putting that time in to avoid any nasty surprises down the line. I would say at the beginning as well plan how you're going to finance, You know, just keep an open mind again about maybe not wanting a mortgage, but is it worth having a conversation because you don't know how that's going to to affect you in terms of it might open up opportunities of bigger budget. And I think just enjoy the journey just you know ask questions, enjoy it. It should be a really enjoyable thing. Of course there are there are things that come along the way that are probably a cultural sort of. Difficulties in terms of sometimes the language but that's why we're you know we're there to help. Sure. Thank you. So to conclude our discussion today, I'd love you both to mention three European hotspots that you particularly value and you would always welcome a client putting it top of their own list. Nicola let's start with you. Wow it's it's really hard Kathy to I'm I'm being honest it's really hard to narrow it down because. There are so many places. I mean, I was lucky enough to to live both in Switzerland and in the South of France. And and I think again people sort of, it's the first question they asked, where would you buy? And I can only go by where I've lived, what I loved, where I brought up my children. So I for me, probably in France, in the South, I would choose the LP area because it offers so much in terms of lifestyle. Then if I was going across the coast, I would go behind Karima, which is a beautiful medieval village. I love the nature, you know, I I I think it's a beautiful area. And then my third I probably would choose Switzerland, I would choose around Montreux by the lake because you know, second home, it's available for second home owners and foreigners to buy there, which is tricky in Switzerland because it has, you know quite quite difficult regulations. It's stunning. I, I I love Switzerland. I think it's, you know, you go there and you take a deep breath and it's absolutely that would be my choice. That's true. Mark, how about you? It is a tough question. I think my my kids were born in Spain. I've got such a deep rooted love affair for Spain. It is the one country for me where. All of my worries just sort of fade away. I don't know what it is. There's something very special and magical about it. So I would probably say southern Spain, the hills behind Marbella, for example. Beautiful climates. There's there's, you know, bandless things to do year round. It's easy to get to. Good investment, international schools, you're not far from Gibraltar if you want to go to Gibraltar, but you know the whole kind of Andalusian culture, you know from Malaga, Cordeberg, Granada, etcetera. Fabulous. I think South, South of France. I spent the other half of my life in France and I'm Franco file too, so I would have to say. Probably a little bit further South to where Nicola is, is, is is saying, I would probably go for the central Bay peninsula, somewhere like a girlfriend Agrimo. That area which actually combines beautiful nature, oak trees, wonderful views, very undeveloped, stunning sea views, but you know, the best beaches in my opinion in France on that sort of Pompleon side. And then the one more to go, where are you going to choose? I'm going to have to go because I haven't been able to learn the language. I am starting to get really attracted by it. And as I approach my retirement, Tuscany and I think I would probably go for somewhere around the sort of Florentine hills, Needless to say, culture, food, lifestyle, the passion and the people. I don't know. You name it, I think Italy. Yeah, Tuscany would be my third choice. Well, six locations of dreams. Thank you both very much for your time today. Plenty to keep in mind. As Nicola and Mark have outlined. Financial planning, of course is the key to the success of any purchase. We'll now hear from John Busby, Head of Sales at Traverse International Finance, like Frank's new partner offering property finance advice in France, who will outline the main considerations to keep in mind. Many thanks, Kathy. I can certainly echo what Mark and Nicola have said about spending a good amount of time understanding how to structure the purchase for the long term and to think about eventual transmission, financial planning and early discussion are good elements of any purchase. To understand the art of the possible, my two top tips would be an early conversation around finance and tax to understand how a loan can optimize the purchase, how to leverage existing assets and to mitigate certain ongoing tax issues around wealth and inheritance. The tax systems in Europe can be surprisingly favorable towards loans, much more so than in the UK at this time, with mortgage interest still often deductible from gross rental income for tax purposes used to cover costs with rental income. As Kate mentioned, the second tip would be getting to an advanced stage with the lender in terms of providing documentation so that they can provide an agreement. In principle this can be useful to show intent and to give comfort to the vendor. Some vendors will not accept finance in a purchase contract. So in some cases part of our service at Traverse is to help get that comfort for buyers of prime property who cannot insert a mortgage clause into the purchase contract. Through Traverse, you can access a wide network of private banks across Europe for purchases in France, Spain, Italy and Portugal. These banks also refinance properties to help generate new funds for investments or property purchases. This is one of the main trends at this time as property owners positioned their assets for any opportunities that rising interest rates may bring or for a longer sale time to achieve the full asking price for their property. Another trend is the increase in Europe of buyers from the US brought over by the strong dollar looking for opportunities to invest and perhaps gain a residency. So we have developed a wide range of solutions for US Nexus clients. The other main trend is the change from a seller's market to a buyer's market. At some levels though, we are still seeing prime properties being snapped up as they arrive on the market by buyers who have done the preparation stage of their journey and are ready to buy. With that, I'll hand back over to Mark for some closing words. Thank you, John. Well, that brings our webinar to a close. Thank you very much for joining us. We hope you enjoyed the conversation and found it informative. Now, whether you're looking to buy or sell an overseas property, or simply want to talk through any of the points discussed today, our details can be found on the left hand side of the screen. We have a dedicated multilingual team in London with extensive international experience, many of whom have traveled and lived abroad, bringing you a unique insight and skill set to your property journey. Our pledge to offer you an unparalleled and attentive service supported by industry leading research. Which can be accessed via the Resources tab on the right. We look forward to helping you with your property plans and leave you now with the selection of beautiful homes we currently have for sale in some of the locations discussed today. Thank you and have a great summer. _1725772658525