London Traders SIPP Champagne on the Cote dAzur



Traders on the London Stock Exchange and investment bankers may earn their huge bonuses by recommending us to buy equities and bonds but when it comes to investing their own money the new SIPP (self invested personal pension) scheme seems to be tempting many to invest on the French Riviera.

The new SIPP legislation allows for the purchase of foreign property to let out and provide income for one's personal pension and, given that properties in this region can generate a return in excess of 5% per annum for seasonal rental alone (plus the ability to visit one's investment in the sun) it is easy to see why this option is attractive.

The proposals, which become law on the 6th April 2006, are in response to complaints about the high cost of managed pensions coupled with low returns over recent times. The barebones are a limit of investment in 2006/7 up to 1.5 Million with the ability to borrow up to 50%, in addition, of the property price and one can invest up to 100% of your annual salary tax free. The maximum limit will increase annually topping out at 1.8 Million by 2010.

Explaining why it is a tempting investment one investment banker, who recently purchased a luxury 2 million euros villa near Cannes, said:

"The fact that villas on the Riviera are cheap compared to London prices, their growth potential and the fact that one could vistit the investment asset often is interesting in itself.

Add into the equation a 15% increase in Riviera property prices last year together with a forecast 17% increase over the next 12 months and then one begins to see the a very tempting recipe

Now add into that equation the killer SIPP factor whereby one will be able to purchase a french property as a valid investment and I believe that prices will rocket from April of next year when the scheme is introduced and people start looking for a new 'home' for their investments."

The French Riviera has always been a magnet for the "rich and famous" but with the proposed SIPP together with the boom in low cost airlines such as Easyjet (http://www.easyjet.com) it is very easy to inspect one's "investment" on a regular basis which means one doesn't have to be retired to enjoy the benefits of life in the sun although any long stay will be considered as a benefit in kind.

With over 10 million visitors a year using Nice International airport this area seems to be a good focus area for tapping into the seasonal or conferece rental market.

"Enquiries because of the new SIPP proposals have already started and suggests it will have a huge impact on demand given that 40% of all buyers on the Cote d'Azur are already from England and this can only increase the attraction of the area.

It is clear that a growing number of buyers do appear to be city traders at the moment. It's incredible we pick up what appear to be young kids from the airport who have millions of euros as a budget sometimes and invariably, if they are under 35 with this kind of budget, they turn out to be traders on the stock exchange or work for investment banks" said Janie Green of http://www.riviera-home-finders.com a professional FNAIM registered property finder service on the Cote d'Azur based near Mougins.

When asked what 2 million euros can buy she said "For that budget you can pretty much guarantee a minimum of 3500 sq ft of house with a pool on an acre or more of land plus a 1500 sq ft guest or guardians house. The area is equivalent to the London market in terms of desirability but try and find 5,000 sq ft of house in or around London for that kind of price It's getting harder everyday to find good properties for under 3 million euros because the demand is so strong at the moment. Good investment properties at less than a Million euros can still be found but generally need what we call de-browning but which have enormous profit potential for those prepared to renovate. The trader clients we have though want the finished article rather than do the work and so go for the higher priced villas"

Are there bargains to be had still Searching one of the largest property portal sites http://www.villa-search.biz shows that there are still beautiful properties to be found for all budgets from 500,000 euros but judging by the number of properties marked as sold it seems one will need to be quick to make your investment before the traders buy them all up!

One such property http://www.maison2.co.uk/listingview.phplistingID=1240 on the market for 720,000 euros already has a ten year history of renting out for in excess of 35,000 euros for only 12 weeks of the year for example.

Examples of rental prices for seasonal rental villas on http://www.rivierarentals.biz show anything from 1,000 to 40,000 per week.

It seems to make sense to add a French Riviera villa or apartment to your portfolio to follow the "smart money" yourself and SIPP your own champagne in the sun.





London Traders SIPP Champagne on the Cote dAzur