Is London’s French population coming home to France?

Is France’s “6th-biggest city” about to see a wholesale exodus across the Channel? Brexit and Macron’s election are certainly making the move back home to France more appealing for French expats living in London, but other factors might be holding back the floodgates. 

Some 300,00 to 400,000 “Frenchies” live in London according to estimates. The British capital has always had a strong French presence thanks to cultural, economic and transport links between the two. That number increased after Francois Hollande’s thoroughly unsuccessful wealth tax saw millionaires flee the country and the French economy stagnate.

Indeed, in the early 2010s London looked like the place to be. The UK returned to growth and lower unemployment quicker than its neighbour – France still has an unemployment rate near the double-digits. Many French citizens also feel London is comparably safer in the context of terrorist attacks in both cities.

But the landscape has changed with the Brexit vote in 2016 and Macron’s election in 2017. Economic growth in the UK has stagnated to below France’s and French citizens there widely report a more hostile atmosphere than when they first arrived. The non-dom (non-domiciled) status some wealthy French citizens enjoy in the UK, which exempts them from paying tax on foreign income, has also been subject to changes and political debate.

One French London-based wealth management advisor called Macron’s election and Brexit “stars beginning to align” for a return of French citizens home. He, and many others, have pointed out that Britain losing its ‘passporting’ abilities would strike a massive blow to the UK’s finance sector, to the benefit of Paris and other European financial hubs.  Paris Property Group’s Miranda Bothe indicates that there is already a corresponding impact on house prices in France as a result of the banking exodus.

Another in the industry highlighted that work experience in London is a highly valuable asset in finding work back home. Headhunters in Paris are apparently inundated with inquiries from those in a similar situation seeking a return to their homeland.

So what’s holding back the floodgates?

Well, London still has a lot of appeal for the young and wealthy. Some French citizens there have described London as a modern city while Parisian neighborhoods seem to resist the forces of change, both good and bad. London is a city where there is always new construction of luxury flats, while Paris has a preponderance of historical properties.

Then there is the difference in salary between the two. Financial positions are better remunerated in the UK, some 15-20% higher for salary and 25-30% for bonuses, according to Thierry Carlier-Lacour who runs an executive search firm with offices in Paris, London, Brussels, Geneva and Madrid. Factor in the cost of living and this difference is less significant, but probably still favorable to London.

And the two diverging property markets mean homeowners would do better to stay put. The fact prices in central London have fallen some 15-20% over the past year and a plummeting sterling make selling now and buying in Paris – where prices are on the rise – unattractive in the short-term.

Some movement back has almost certainly already happened, but hard numbers on this are impossible to glean. Brexit negotiations and the macro-economic climate – both intertwined – will continue to determine the trend. All things being equal, the question of where you’d invest in property right now is an easy one, but things are rarely equal.