For many foreign buyers, France remains the ultimate property dream with its mild climate, picture postcard scenery and many gastronomic delights. What’s more, the pounding that the euro has taken lately, means that now is a great time to buy. France is stable and isn’t about to go bankrupt, however, the situation in Spain, Greece and Italy is affecting French property prices.
This may explain why British interest in French real estate is on the rise. “Between May and September last year, we have seen an encouraging increase in the amount of enquiries for our properties in France,” says Tony Osust, CEO of Holprop Ltd. Mr Osust went on to say, “Principally prices in France have increased in 2011, and look to increase again this year, as there has been such a spike in demand.
The pound has reached a four year peak against the euro. With the pound now at €1.28310, the euro is at its lowest level since 2008”. The rise of the pound in recent months has been striking, having sunk as low as 1.03 in 2009, 1.10 in 2010.
This is good news for Britons looking to buy in France.
Ben Davies, of currency specialists First Rate FX, said, “Your pound will go much further. For example, If you were buying a house priced at €225,000, you could expect to pay around £175,000 for your currency. However, if you had been buying that house this time last year, when there was a lower GBP-EUR exchange rate of around 1.07, the cost would have been in the region of £203,000; a considerable difference.” He continued, “The riskiest strategy is to do nothing, in the hope that rates will climb further. That is like playing roulette, and letting the markets decide your budget. Fixing your rate will bring you peace of mind and no nasty surprises when you have to pay for your house in three months’ time.”
Trevor Leggett, of Leggett Immobilier, points out that the strength of the pound against the euro is a very significant factor, and a positive one too, saying: “We are already seeing the euro/sterling rate hitting the 1.25 mark and with French mortgages already among the cheapest in Europe it looks like there will be plenty of people looking to both buy and sell over the course of the year. This time last year you could get €1.10 to the pound which means that for a client with £400,000 to spend, they now have around €60,000 more in the kitty than they did 12 months ago. That would pay for a pool, tennis court and a season ticket for the plat de jour at your local brasserie.“
It is a similar story with French mortgage rates, which are on their way down. As Sharon Hill, of French Mortgage Direct, reports, “In April 2011, a 25-year fixed mortgage cost around 5.15%. Now, a year later, rates are typically 4.20%. In monetary terms, the mortgage payment has decreased from €1,186.72 for a €200,000 mortgage to €1,077.88. This is a saving of €1,306.08 per year, which could effectively pay for another trip to your French property each year! This is great news all round and may mean that the dream home you had your eye on is now affordable.”
It is hardly surprising, therefore, that Holprop.com are seeing that France’s popularity is still going strong. According to Holprop.com, in the first three months of the year, France is the top search destination for prospective overseas property buyers. Its research for the first quarter shows that a large percentage of Britons looking to buy abroad are choosing France, followed by Spain and then followed by enquiries for US properties.
For buyers considering purchasing property in France, here are the main things to consider:
1. When dealing with a seller make sure that if you do not speak good French you get help with translation.
2. Although there are laws offering solid protection to buyers, if you have any doubts then seek advice from a local solicitor.
3. Do not sign anything until you are in front of the notaire to process the sale.
4. Appoint your own notaire rather than sharing one with the vender. This way yours may look out for you in the sale.
5. Ensure that you know what you are buying and the exact condition of the property you are purchasing.
6. If you are relocating internationally, it is worth looking for a French mortgage over a mortgage from your own country as they may offer more competitive rates.
7. Once you have found a mortgage broker, make sure that written into your mortgage are conditional clauses that take into account any planning associated with your property.
8. If the seller owns other land that adjoins the land/property you are buying, ensure there is a clause in the contract that gives you first option to buy should they decide to sell in the future.
9. Even though the vendor may ask for a 10% deposit, this is not obligatory and a lesser amount could be agreed.
10. Make sure that you get your own survey.
By www.holprop.com News (August 14, 2012)
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