France remains the most popular destination to buy a property abroad, despite ongoing financial troubles within the eurozone
According to the recent Property Hotspots Report from currency exchange specialist HiFX, France tops the list with 23% of potential buyers looking for a property to purchase across the Channel.
The report, which reveals the top destinations for property ownership abroad, showed that buyers remain undeterred by the economic uncertainty in the eurozone. It also revealed that they have not been discouraged from buying property in France by the tax hikes that were introduced by the French government following the election of President Hollande.
“With an abundance of low-cost airline routes, more tourists than any other country in the world, short flight times and the great choice France offers for both snow and sun lovers, it’s easy to see why France remains a favourite with British buyers and regularly tops quality of life polls,” comments HiFX director Mark Bodega. “In troubled times owners and investors seek safe havens, and they simply don’t come more secure or enjoyable than France.
“British buyers would do well to remember though that negotiation is the key in France. Sellers are having to accept some hard bargaining – which could mean that dream cottage in Carcassonne is closer to becoming reality than you might think.”
The Quarterly Index published by The Overseas Guides Company also reveals a similar trend, with figures showing that more than 79% of Britons remain committed to purchasing a property abroad. During the third quarter of 2012 there was also an increase in the number of British people looking to buy in the eurozone. Accounting for 24% of the enquiries received, France shared the top spot with Spain at the end of the quarter, and led the way for the year overall with a 22% share of enquiries.
France continues to be seen as a stable investment and now certainly seems to be a good time to buy, with advantageous mortgage rates available. The French mortgage market has picked up in recent weeks, and there is a wide range of finance options available to people who are keen to make their dream of owning a home in France a reality. According to overseas mortgage specialist Conti, the number of people progressing from the enquiry stage to the ‘go-ahead’ stage for French mortgages in October increased by more than 50%.
“France still offers the widest range of finance options and best available rates in Europe for UK buyers, with current rates starting from just 2.3%,” says Clare Nessling of Conti. “As it’s in a relatively secure situation, loan-to-value ratios are still high and recent reductions in mortgage rates mean that buying a property in France is now even more affordable. Against the volatility of the British market, French property is seen as an increasingly solid investment option over the long term. And while it hasn’t been reduced to bargain basement prices, it generally remains well under UK averages, with plenty of properties to choose from. A combination of really positive factors have come together to provide an ideal time to buy.”
This view is supported by John Busby of French Private Finance. The specialist mortgage provider has seen the number of enquiries increasing across the board as would-be buyers take advantage of the low rates that are now available.
“France is a good choice as the mortgage market is well developed for lending to international buyers,” he says. “The long term fixed rates, with low margins, make France one of the best places to invest in property. If you have some capital which is losing money in a savings account, it is well worth considering putting it towards a French property with a fixed-rate mortgage. Not only will you gain some peace of mind from inflation worries at home, you will also have an asset which you can enjoy from time to time in the most visited country in the world.”
The falling Euribor (the interbank lending rate) has contributed to these favourable lending conditions. “It is a good time to take a mortgage in France,” comments Russell Kirby of French Private Finance. “Whether you want to benefit from security or very low variables, mortgage rates are pegged to the Euribor which is at an all-time low. People who were initially concerned by Hollande’s tax clampdown have realised that the competitive borrowing rates and low property prices could more than offset any additional tax losses in comparison to buying during Sarkozy’s term. Additionally, buyers tend to invest in France on a longer term basis that may span several presidents, for lifestyle reasons such as the climate and the fine cuisine.”
Another boost for British buyers has been the growing strength of the pound against the euro, which has given them greater spending power across the Channel. According to currency broker FC Exchange, interest in buying and selling property in France is indeed continuing apace.
“Our clients are taking full advantage of the weakening euro and the eurozone’s economic challenges,” observes James Croft. “The strength of sterling has given them more buying power and there is definitely no shortage of investment opportunities.”