30 expert tips for buying a property and living in France
PUBLISHED: 15:50 10 January 2019 | UPDATED: 15:50 10 January 2019
Whether you're thinking of buying a French property or setting up your new life in France, here is some essential advice from the best in the business
Get to know your chosen area well. Visit out of season as well as high season if you are thinking of buying in a holiday resort: would you want to stay in an area that is extremely quiet – or extremely busy – at different times of the year?
It is important to understand not only how you will fund the purchase, but also how your funds will be managed in the future if you are going to live in France: have you spoken to international investment advisers? In relation to the purchase itself, if you are funding via a mortgage, ensure you have obtained an offer in principle before you buy. If you are selling in the UK to fund the purchase in France be extra careful: the two processes are different and it is remarkably difficult to synchronise them. There is a real risk you could be required to complete in France before you have sold in the UK. Not all buyers are able to own two properties, and the risk of facing legal action should be a sufficient deterrent on this point.
Some clients are surprised that the purchase documentation is drafted in French; for most, that is of no concern. Occasionally contracts will have translations, but they are often rather generic. It is important that you fully understand the procedure in France, and also exactly how the contracts work – the process is different south of the Channel.
4. France & UK Estate Planning
Another important area to consider is how you will structure the purchase with a view to inheritance law and tax matters. Planning for the administration of a person’s estate on death is not the first thing you may want to do when buying a house in France, yet it is vitally important. Even with the harmonisation of succession laws across the EU, many complications can arise, not least for tax purposes.
Any property transaction in France will be overseen by a notaire; however their role is different from that of a solicitor in the UK. Their main task is to ensure the completion of a transaction, without necessarily advising on whether the transaction is suitable for you. You may benefit from instructing solicitors in the UK with specialist knowledge in cross-border matters.
Matthew Cameron is a Partner and Head of French Property Services at Ashtons Legal
1. Keep yourself up-to-date with the latest news
As demonstrated by the recent volatility in the pound, following the latest currency news is very important if you want to time your transfer effectively. Even the difference of a few cents per pound can add up to thousands more or less on larger currency transfers, so taking advantage of regular market updates and the guidance of currency professionals can prove invaluable.
2. Protect your funds for peace of mind
When you’re moving your money to France, you want to feel confident that your funds are in safe hands. To ensure your transfer is being managed securely, always use an international money transfer provider that’s authorised by the FCA and operates segregated client accounts.
3. Weigh up your options
With Brexit uncertainty playing havoc with exchange rates, it’s well worth exploring the different transfer options available and ways to protect your funds from exposure to market fluctuations. With a provider such as TorFX, for example, you could use a forward contract to fix an exchange rate for up to two years ahead.
4. Unnecessary fees? Non, merci
While most banks will charge you transfer fees for moving your money abroad, currency transfer specialists like TorFX don’t charge fees. If you’re making regular transfers (like moving your pension to France every month) these savings can really add up.
5. Secure yourself a more competitive exchange rate
International money transfer providers work on different margins to banks, which means they can typically secure you a more competitive exchange rate, helping you get the best possible return for your currency transfer. Getting a bank-beating exchange rate could have a substantial impact when you’re transferring the size sums involved in a property purchase, potentially leaving you with thousands more euros to spend.
John Beddell is CEO of TorFX, a multi-award-winning provider of currency transfer services
1. Plan ahead
Get initial approval from a lender before you have found your house. That way you know your budget and it avoids having to reclaim your deposit, if the sale fails. Brokers such as Offshoreonline.org have a ‘no offer, no fee’ arrangement. Always deal with professional estate agents.
2. Avoid overly remote houses
Many lenders in France do not like properties that are too far off the beaten track – they take the view they are unsaleable, as there is no domestic demand. Think about who would buy your house, when you want to sell it again, before you buy it.
3. Get your finances in order
French lenders work on an affordability model, so total lending is important before a mortgage is approved. Pay off any small loans too, this increases your chances of success. Mortgages are available with just 15% deposit.
4. Buying a new build?
Check with the bank first. All developers have to carry statutory insurance and be approved by the bank. Don’t offer on a new house before finding out if the bank will finance it.
5. Where do you live, who do you work for?
If you live in the UK and are salaried, self-employed with three years of accounts or retired, you will normally get a loan. If you live and work abroad, check first – French banks cannot normally deal with US residents, for example, and lend less to expats in countries such as Dubai, Hong Kong or Singapore.
Guy Stephenson is the director of Offshore Online, a Bilingual K qualified mortgage broker with 25+ years of experience arranging French mortgages
1. Do your research
Make sure that you have done your homework on where you would like to buy and what your goal is. Very often we are asked for a renovation project and take clients to look at tumbling down piles of stone when realistically they are only willing to hang wallpaper. So know what you are prepared to do! It will help both you and your agent.
2. Talk things through
We are always available to clients over the phone or by Skype to take them through the buying contract. In addition to discussing with a notaire or lawyer, it is important to talk through the contract with your agent because they know the property and what was discussed during the visits and the negotiation.
3. Eat before you buy
We know it sounds silly but buying a house is a massive decision that can’t be made on an empty stomach! If you are out and about for multiple visits all day with your agent, make sure you take a packed lunch and a drink with you!
4. Check the septic tank
One major thing to check is if a property has a septic tank, and if it conforms to current standards. This will be highlighted in the inspection report that the vendor is legally required to provide so make sure you read and understand it. A system can be marked as ‘non-conforme’ for a small and inexpensive reason, so make sure you find out what the problem is and how easy it is to fix before discounting a property for that reason.
5. Structuring a property purchase
Think about how to structure your property purchase as there are various options available, such as through a property holding company (SCI), which can be a good estate planning tool with tax advantages.
Philippa Headdon is an estate agent at Compass Immobilier, covering south-west France
1. Do not consult with the man in the bar, or his internet equivalent!
Make sure you take advice from experienced people with a trustworthy and proven track record. The team at LBV have over 50 years’ experience of living and working in France, all of which is on tap to benefit you.
2. Conserve your capital
You may have a healthy bank balance on arrival in France – but that soon disappears if you need to use it for everyday living expenses. Don’t expect to be able to pick up casual employment – why not use relocation to start your own business and be your own boss?
3. Location, location, location
Don’t isolate yourselves and don’t necessarily buy lots of land just because you can. You may prefer to be able to stroll to the local bar instead of being a slave to the garden, and for your own personal integration, although it’s scary you need to mix!
4. Earning a living
If you need to earn a living, why not invest in a franchise opportunity which gives you a full relocation package AND a new lifestyle all in one. The Channel is not very wide, but the cultural differences are enormous so take advantage of the support provided by a reputable brand.
5. Hang on to your sense of humour
Accept that you wanted to relocate to France because of the laid-back ambience and slower pace of life. When that translates into things not happening as fast as you would like, or French bureaucrats not answering emails, just smile and remember c’est la vie.
Sally Stone is the founder of LBV property management network – since 2002 providing assistance with relocation in France, from basic advice to business registration, all with full ongoing support.
HOLIDAY ACCOMMODATION TIPS
1. Decide on your target market
The type of guest you wish to rent to will determine how you furnish, equip and decorate your property. For example, if you’re targeting families you’ll need to make sure you supply baby and toddler equipment, and a washing machine and dishwasher. And whoever you decide to rent your property to, WiFi is a must these days.
2. Budget carefully
Budget carefully to ensure you meet your financial expectations
Do your homework on the rental rates other property owners in your area are charging, so that you can make an informed decision on where to pitch your rates. Keep your rate structure simple, along with any special offers you may need to discount unsold weeks.
3. Be organised and respond promptly
Organise your booking procedures so you can respond swiftly to enquiries and booking requests. Prospective guests expect to hear back from owners promptly and for their bookings to be supported by clear terms and conditions and payment procedures. Even if you can’t accommodate a booking request, it’s only courteous to reply to emails and this keeps the door open for future enquiries.
Market your rental well, as the book direct holiday property market is very competitive. Using an advertising website like Holiday France Direct takes away a lot of the work. However, you still need to supply attractive images and information about what to see and do, as well as clear, accurate property details and pricing. Our properties advisors are on hand to assist you to get most from your advertising.
5. Deliver on your promise
Deliver what it says on the tin. Our long experience as part of the Brittany Ferries group is that you must deliver what you advertise and properties must be well maintained and spotlessly clean. And if a guest complains, deal with this positively and efficiently to minimise disruption and the risk of drawn-out confrontation.
Laura Habgood is Properties Advisor at Holiday France Direct