A new property development in the south west of France is set to become Europe's first lesbian, gay, bisexual, transgender (LGBT) retirement village and the news has already been causing headlines. But is this an attractive investment opportunity for British "gay and grey" retirees?
Set up by The Villages Group, a British company based in Paris, the site will have 107 eco-friendly villas in a seven-hectare gated community, located on the banks of the Canal du Midi – a Unesco World Heritage site in Salleres-d'Aude. Danny Silver, the firm's founder, says he has unwittingly tapped into a lucrative market. Originally the project was pushed solely as an active-living village for over-50s, with on-site amenities including tennis courts, pools, a gymnasium, saunas, and entertainment and cultural programmes.
Initial progress was slow and Mr Silver was on the verge of closing the project down for a year, waiting for the lifeless real estate market to pick up, when he got the idea to change tack and market the village to the gay community. The story soon spread and he was inundated with requests from prospective buyers, with particular interest from the French and Americans. The firm has started to sell off-plan in the past month, with nine properties bought so far.
"We instructed our PR people to do a small piece back in July to see what happened – and it went ballistic," says Mr Silver.
American developers were the first to cash in on the spending power of the gay economy, the so-called "Dorothy Dollar", setting up several successful housing projects geared towards the LGBT community. One notable housing project for seniors was set up in Hollywood called Triangle Square, opened by Gay & Lesbian Elder Housing in 2007 and fully occupied today with 112 residents. The recession has halted other projects but there are still plans for similar communities in Chicago and Philadelphia.
In contrast, there is a notable lack of LGBT-friendly accommodation across Europe, but now that the "rainbow" village has been given the go-ahead in France, we could see a growing trend across the Continent.
The properties will be completed by spring of 2015 and the 68 square metre, one-level houses cost either €236,000 (£200,000) or €248,000 including all legal fees and taxes. The more expensive end-properties have larger terraces and the design incorporates eco-friendly materials and energy-efficient glass to maximise light, ventilation and insulation.
Management charges are steep at €70 per week but this includes taxes, weekly cleaning, on-site entertainment and all maintenance fees.
The Villages Group will also cover all "closing costs" including legal notaire fees and taxes, as well as the first year's management fees and taxes, if you buy before 20 December 2013.
The properties are all being sold on a straightforward freehold basis, rather than a more complicated leaseback arrangement, but owners are free to buy and rent out as they wish. Crucially, owners are buying a share in the village itself, which Mr Silver says will help keep maintenance fees down. The owners form their own committee (with one vote per property) and after the first year they get to decide whether they want to keep the management in place or hire their own company.
Legally, the homes cannot be offered exclusively to LGBT buyers, but clearly the village will be openly gay-friendly. This may make it harder to sell on down the line, so think carefully about whether you're happy to invest for the long haul.
"Consider your exit strategy for such a niche investment, as the sell-on target audience is going to be smaller than for a mass-market development. So be happy that you may well be investing for the medium- to long-term," says Louise Reynolds, director of Property Venture.
It may be a concern that the mayor of Salleres d'Aude, Yves Bastié, was reportedly disgruntled to hear of the new LGBT-friendly focus and concerned about its impact on the image of the town. Mr Silver says he is certain he wouldn't have got planning permission had this been the original concept for the project, but he says the mayor is now on board (he even presided over his first gay marriage last month) and building will be under way in a few weeks.
France is benefiting from the positive sentiment wafting over the eurozone in general, but real estate of any persuasion is never a safe bet. The Federation of Real Estate in France has reported a 3.6 per cent decline in property prices in the first half of 2013 and rural areas have been hit particularly hard. The French government also keeps changing tack on property and wealth taxes, but fortunately the most recent change is good news for foreign buyers – the minimum holding period for second homes attracting maximum capital gains tax relief (CGT) has been reduced from 30 years to 22 and there is a 25 per cent discount on the CGT owed for sales until October 2014.
"France has historically been one of the safest places to buy off-plan because it has more checks and balances in place to protect the purchaser," says Liz Rowlinson, editor of A Place In The Sun magazine.
Each development has a notaire, who ensures that planning permission, insurance and bank guarantees are in place. The developer is also obliged to fix any defects within the first year and provide a ten-year building guarantee. The contract will also state when the development will be completed, and if there are unreasonable delays you will be able to withdraw and get your money back.Under French law, developers can ask for a 5 per cent deposit and this must be placed in a client account until the sale is completed. Buyers have a seven-day "cooling off" period during which they can back out and receive a full refund.
Check the track record of the developer (the Fédération des Promoteurs-Constructeurs is their professional body) and appoint an independent professional adviser to go through your final contract.