French property market going strong

Despite a change of president, French property market still a strong option for British housebuyers

With Fran�ois Hollande installed as French President, there has been huge interest in how the country’s property market will be affected.

Talk on the subject has been dominated by the upper echelons of income tax being increased, which could provoke an influx of wealthy French dwellers into the London property market. But the general feeling is that the market won’t be adversely affected for British buyers.

The strength of the pound against the euro is prompting a lot of interest from Britons looking to buy in France (as was demonstrated at the recent French Property Exhibition in Wetherby – see ‘Property show receives boost’, page 13). 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, points out: “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 recent figures show that France’s popularity is still going strong. According to the Overseas Guides Company, in the first three months of the year, France is the top search destination for prospective overseas property buyers. Its report for the first quarter shows that 22% of Brits looking to buy abroad are choosing France, followed by Spain with 16% and the US with 15%.

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