French Mortgage Market

The French mortgage market has undergone significant changes in the last couple of months, including anticipated rate rises from their historic lows in early 2011. This increase has occurred due to a rise in the European base rate.

Our partners, IPF have recently launched a new service to protect clients against rising French mortgage rates and save significant money along the way.

IPF’s rate update is designed to keep clients informed of potential changes to French mortgage products in advance of their implementation. This provides our clients with the best chance of securing the lowest possible French mortgage rates. The lenders on IPF’s panel will often provide up to a month’s notice regarding pending French mortgage rate rises. Sharing this information with our clients ensures they have the best possible chance of securing the most competitive rates available.

You can sign up to IPF’s rate update by calling one of their French mortgage consultants on 020 7484 4634. You can then choose how you wish to receive the latest rate update – by SMS, an email or an update via twitter.

Approval French Mortgage

IPF also have the ability to obtain an approval in principle for your French mortgage, while you are in the process of looking for your French property. Combined with the rate update, this means that our clients are in the strongest position possible when it comes to completing the purchase of their dream home in France, saving significant amounts of money and aggravation

In this rapidly changing market we believe it is more important than ever to work with a French mortgage partner that gives you the best possible chance of completing your French property purchase. IPF has worked very hard and successfully, despite the difficult market conditions, to establish a strong position in this key area of the market.

You can request a French mortgage quote by clicking here

What do customers say?

“Dear Elena and Robert,

I would just like to say thank you both for your help very much, I found IPF brilliant in every way to insuring my mortgage in difficult times! But a special thanks to you both for your quick and professional work to make this happen for me! I would recommend IPF to anyone that would need your help with no hesitation.

You have both made a very difficult and uneasy time for me become a dream come true and i can’t thank you enough for that!!

Yours sincerely,
Matthew Haines”

One of the new tax proposals effective from January 2012 in France is a new 20% tax on the rental value of SECOND homes for ANY nationality.

The tax will be 20% of the property’s “valeur locative cadastrale” (a theoretical value). You can find this value at www.cadastre.gouv.fr. So if a property has a rental value of 3000 euros then the annual tax would be 20% of 3000 euros – i.e. 600 euros per year.

First, this does not apply to expats who are now living in France permanently. Although there are separate proposed changes to their wealth tax.

Second, if you ensure that your home(s) is available for rent for the whole year via a local letting agent then there will be no charge.

At this stage there are no indications how the tax will be applied if the property is not available for the full year.

In addition, the new 20% is likely to be challenged under European Law (since it will discriminate against foreign owners of holiday homes)

One of the major factors for a UK resident deciding to buy a French property is the sterling / euro rate. If the pound gains in strength, then a French property becomes cheaper (in pound sterling terms). So where is the currency market heading? Our partners for French Currency Exchange Services at WorldWide Currencies provided the following summary (April 2011).

GBP (Sterling)

Economic data from the UK shows stronger industrial/export growth. Despite stronger than expected`official’ retail sales data this month, the British Retail Consortium data definitely confirms weakness in thissector. Austerity measures continue to bite with consumers reluctantly spending. Medium term economicgrowth prospects remain clouded thus keeping the Pound under pressure against the Euro as marketsexpect the ECB to continue their rate hiking programme. Consumer confidence remains low in the UK. AnySterling gains made versus commodity based currencies in March have also been given back this month.In this weaker USD environment the Pound is expected to trade higher versus the USD, but looks cappedagainst the Euro at 1.1350.

EUR
The Euro traded above €/$ 1.46 and has made further gains since yesterdays FOMC meeting and pressconference. Euro sovereign debt issues have taken a back seat again despite a further downgrading ofGreece. A second round of hawkish comments from ECB’s Trichet this month results in more aggressivebuying of Euros. One would now assume that Euro Zone inflation is more of a concern for the ECBcompared to those views of the Fed Reserve and Bank of England. Two further rate hikes of 0.25% areexpected by the year end.

EUR Trend: Overall – Euro Positive

If you have any currency concerns or want the best rates with no commission charges –> Worldwide Currencies

I have never before had such a distinguished collection of people sending me e mails……American veterans of Irak who have stashed loot away, Nigerian bank officials and state governors who seek to export their money under the radar, a terminally ill lady who wants to donate her cash to me, a Rolls Royce dealer who cannot wait for details of my bank account in order to contribute to its’ girth….and all because my house is for sale! I am sure it was never like this when I was first house hunting in France!

In those far off days, the internet market did not exist…or if it did, France hadn’t heard of it and neither had I. Mark you there are a lot of agents and notaires who still haven´t heard of it to judge by their sales methodology which consists of asking around among their friends to see if anyone wants to buy a house and then sinking back in their chairs, duty done.

Accordingly I decided on the areas I liked and set out to visit agents’ offices, guided by perusal of the Yellow Pages in the kiosk in the local post office. I am sure that there were agents who weren’t in the Yellow Pages, and they’re probably the ones who still aren’t using the internet to this day, distrustful of any technology that might cost money and even more distrustful of any technology that comes for nothing.

The more organised had loose leaf binders with photographs and details…..some even with prices….and when I had made my choice, the page would be copied on to yellow paper in black ink, thus reducing a ‘des res’ to something more closely resembling a fire damaged wreck in seconds.

These days agents are very wary of letting you out of their control…you might do a deal with the owner behind their back, after all, to avoid paying the commission….and some even make you sign a paper agreeing that they have introduced you to the property, but in those days you would  be given the keys where they existed, the agent would indicate the location of the properties on a map – ‘we are here and the enemy is there’ – and off you would go into the wilds of rural France while he settled down to peace and quiet again.

I saw some wonderful properties…..there was half a chateau, which was enchanting, fairy tale turrets and all, except that the other half was owned and used by a family of dedicated scrap metal merchants who believed in round the clock working and displaying their stock to advantage…..there was the house with wallpaper depicting the worst excesses of the French Revolution which covered cracks into which you could insert your hand up to the armpit……there was the house without wallpaper from whose cracks you had a panoramic view of the countryside…..there was the house with the vaulted stone cellar where the ribs were lined with bats who rustled in annoyance when I shone my torch on them…..there was the house with miles of underground passages complete with railway lines and a large hole in the courtyard giving immediate access to same…..there were Marie Celeste houses where the remnants of the last meal were green on the plate….and there was the house with a tower which had such an evil atmosphere that I went out faster than I came in.

‘For sale’ signs did not exist and, given the French habit of living behind closed shutters whenever the sun shines, it could be a toss up as to whether the house you were about to visit was actually the one for sale, or whether you would open the kitchen door to find a couple making love at the sink. Another house involving a hasty exit.

I was looking for a cheap place that might need some work, so I was spared the Edgar Allen Poe experience of entering a room only to find that, as the proud owner had wallpapered not only the walls but also the ceiling and the door, I couldn’t find my way out again. It had happened to me once in a hotel in the Pas de Calais, where I had found myself in a prison of electric blue shag pile  with the owner’s dog guarding the only possible exit – the window. Luckily it had an en suite.

It was not only an introduction to French rural property, it was an introduction to an invaluable item of local lore – knowing how to approach a property from the right side. There was one house which looked ideal, but on three successive days I had failed to find it. On the fourth, the agent pulled out the map and made me show him how I had gone about looking for it. I traced my route on the map and he had his ‘Eureka’  moment.

‘But you are approaching it from the wrong side! You’d never find it like that!’

Now, in my innocence, I had thought that a road was a road was a road. No, not in rural France. He showed me the right way to approach the house…..on a long lane leading from the village rather then on a long lane leading from the main road and, on  trying it, I found the house at once. I had been all but on top of it three days’ running, but had not found it due to being on ‘the wrong side’. It is a phenomenon impossible to explain, but after a while spent running round the lanes of rural France you will come to understand it for yourself.

I bought that house, and it was a happy introduction to life in France.

If you are house hunting, I hope that you will be as fortunate.

The latest European housing market review by the Royal Institution of Chartered Surveyors (Rics) said there was evidence of fragile recovery across much of Europe, with low interest rates and reviving economies helping to stave off “market meltdown”.

Top Countries:
Scandinavian homeowners enjoyed some property price growth last year. Norway topped the table with values up almost 12% last year, followed by Finland (8%) and Sweden (7%). The latter is expected to see continued buoyancy as a result of attractive borrowing costs and temporary tax breaks.

Britain came fifth, according to Rics, with prices rising by 1% in 2009 overall, and by 10% from their low point in April.

How did France fare?
In Germany, Italy, the Netherlands and France, last year’s falls were relatively small (ranging from 4% in Germany to 6% in the Netherlands).

Housing markets around the fringe of Europe are still dragging down economies in a vicious circle, and all European housing markets continue to face credit constraints and great uncertainty.

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• House price rises put UK in Europe’s top five (guardian.co.uk)
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Buying real estate in a foreign country can be mind-boggling. And unless you’re familiar with the specific country’s real estate climate and regulations (in this case, France), you might find yourself in a less than ideal situation, or worse yet, you might be inclined to pass up on an otherwise smart real estate transaction. But it doesn’t have to be that way, especially with our easy-to-follow tips for buying French property.

Tip #1 – Become familiar with the market

Before jumping into the French real estate market, become familiar with the local market. Read up about current real estate trends in the country, and see what is selling and what is not. And if you’re interested in a particular region of France, make your research area specific. Part of that research should also include whether prices are stable, on the rise or are decreasing for that particular area.

Besides studying trends and price movements, surf the web for actual property photos so that you can get a feel of what local properties offer as far amenities and prices.

Tip #2 – Search out the professionals
Part of your research should involve finding the right professionals for your French real estate transaction. Search the web and Yellow Pages for real estate agents, mortgage banks and notaires (trained specifically in French real estate law). Once you narrow your selection to three or four choices for each category, ask each one for a few references.

Tip #3 – Visit prior to buying
Though a picture can be worth a thousand words, it still doesn’t compare to seeing the property up close and personal. Once you’ve narrowed down your selection of properties, take the time to view them prior to buying. Try to meet with the real estate professionals as well so that you can hire the right one for the sale.

Tip #4 – Ask for an appraisal
Though not common practice in France (outside of commercial property in Paris), ask for a property appraisal, either from the property’s architect or builder. If that’s not possible, insist that your real estate agent supplies you with a short list of appraisers in the area. By doing so, you’ll find out if the property is worth the price and the investment.

Stay at one of the top Paris hotels located in the famous Golden Triangle area.

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