Good Profits on French Property

One big advantage for existing French Property Investors (from the UK) is that they are already sitting on good profits on their French property thanks to the strength of the Euro.

In the last six months the Euro has increased in value by about 10% against sterling (six months ago it stood about 1.48 euros to £1 - now about 1.33). So a property bought at 200,000 euros costing £135,000 is now worth in £sterling: £150,000. Many agencies are also reporting that prices increased last year too - so your investment is probably worth more.

What of the future regarding currency exchange rates? It is widely predicted that the UK will have several further cuts in the base interest rate during 2008. Cuts (or even predicted cuts) in the interest rate are usually accompanied by falls in the value of sterling against the euro. The euro base rate may drop too but it is already significantly lower that the UK rate so there is less room for manoeuvre.

Many UK investors have been drawn to the French Market as Buy to Let in the UK has been less rewarding in the last 12 months. About 50% of houses in France are rented so their is a strong demand for rental property! Euro mortgage rates are also more attractive than UK rates.

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