French mortgage rates set to rise, firm warns

May 4, 2011, 5:00 pm

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Individuals looking to buy property in France may be interested to learn that higher eurozone inflation could lead to an increase in mortgage rates in the country.

This is according to Athena Mortgages, which claimed that the rise will come on the back of the European Central Bank's (ECB) decision to raise the main interest rate to 1.25 per cent in April.

It comes after two years of the ECB leaving the rate at one per cent and is an attempt by the finance house to ward off inflation.

However, Athena Mortgages noted that there has not been much change in the rates on offer for mortgages in France since the announcement of the increase.

"Markets and banks had in fact already priced in this increase. We have seen an average increase of about 0.20 per cent in the cost of variable rate mortgages, with some banks opting to further increase their margins," said director of the firm John Busby.

But the organisation added that further increases are on the way.

"We should expect further increases to the lowest rates on offer and a flatter market overall as it becomes more expensive for banks to refinance and maintain market beating rates," Mr Busby said.

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France top choice for Brits buying abroad

September 28, 2011, 5:00 pm

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Britons looking to purchase property abroad should consider homes in France .

This is because the country has been picked out as the best option at the moment by a Savills report for the Daily Telegraph.

The range of dwellings on offer is among the best in the world, while certain parts of the country - such as Brittany and Normandy - are easily accessible from the UK.

"French banks have continued to lend on second homes, stimulating the market," the report stated.

Prices are bouncing back after taking a 20 per cent drop in the cost of a dwelling between 2007 and 2009.

Other countries that fared well in the study are the US, Portugal and Italy.

The French ski resort of Megeve recently recorded a 4.3 per cent growth in real estate prices in the year to June 2011, according to the Knight Frank Ski Resort Property Index.

Meanwhile, US locations Telluride and South Lake Tahoe saw prices fall annually.
 

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French property market 'has potential'

November 17, 2011, 4:00 pm

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Investors looking for a property abroad may want to consider France, one expert has claimed.

Tim Harvey, from euro mortgage specialists Offshoreonline.org, explained that it is currently easier to arrange a high loan-to-value mortgage in France than it is in the UK.

He added that mortgages for up to 85 per cent of a French property's sale price are "widely available", with rates of around 3.45 per cent.

Mr Harvey also made some suggestions about where to buy real estate in the country.

"High -quality areas such as the Cote d'Azur and towns such as Nice and Cannes will always have a special appeal as second homes, but also as rental propositions, as the area has such strong leisure and business traditions," he stated.

Another part of the country that may attract investors due to its robust tourism industry is the French Alps.

The Savills Alpine Property Market Spotlight highlighted the resorts of Val d'Isere, Courcheval and Megeve as being among the most expensive in the region.
 

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French property market 'a good target for UK buyers'

March 25, 2012, 5:00 pm

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British buyers are able to get a more favourable mortgage rate in France than in any other European country.

This is the assertion of Clare Nessling, director at Conti, who explained purchasing real estate in France and elsewhere overseas has become "much more affordable" due to the predominantly low interest rate environment in Europe and the falling value of property in many nations.

She went on to point out that the French mortgage market has fared better than the majority of its counterparts in Europe because it has historically taken a more cautious approach to lending.

"It currently offers the widest range of finance options and best-available rates in Europe for UK buyers. It is in a relatively secure situation and loan-to-value ratios are still high," Ms Nessling stated.

The attractive mortgage terms provided in France may be one reason behind its popularity as a retirement destination.

Earlier this month, managing director of The Villages Group Danny Silver drew attention to a survey by the National Association of Pension Funds, which found 34 per cent of people nearing retirement age would consider moving abroad to enjoy a lower cost of living. Mr Silver highlighted France as the ideal country to choose due to its food, culture and proximity to the UK.
 

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Is France's property market set to cool?

April 4, 2012, 5:00 pm

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There are indications the French property market may slowdown as the year progresses, with a number of factors helping to cool the sector.

According to a Global Property Guide report, the threat of a recession in the eurozone and the forthcoming presidential elections - which are due to be held in April and May - have made purchasers "more cautious".

The publication cited figures from the National Association of Real Estate Agents in France, which revealed price growth in the final quarter of 2011 was considerably weaker than the previous three-month period.

Between October and December last year, the value of property climbed by 1.04 per cent annually, while in the third quarter, prices rose by 7.1 per cent compared to the same period in 2010.

Last month, Clare Nessling, director at Conti, revealed the French mortgage market offers the most attractive rates in Europe for British buyers. She explained it is "in a relatively secure situation and loan-to-value ratios are still high".

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French mortgage market 'attractive for Brits'

May 2, 2012, 5:00 pm

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The level of finance available for property purchases in France makes the market very attractive to British purchasers.

Writing for My Introducer, Clare Nessling explained the nation's banking system has not been hit as hard as those in other countries, because its financial institutions exercised more caution than some of their counterparts elsewhere on the continent.

She stated the French market "currently offers the widest range of finance options and best available rates in Europe for UK buyers, and it's in a relatively secure situation".

It is also possible to take out a high loan-to-value mortgage on a property in France, with some providers continuing to lend up to 90 per cent of the purchase price.

A recent survey by HiFX revealed France is a top choice for British buyers overseas, with 35 per cent of people seeking foreign real estate hoping to buy in the country. This was more than double the number of purchasers considering Spain - which attracted 16 per cent of those surveyed - making it the second most popular destination for property deals, the Press Association reported.

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French lending market 'tightening'

June 28, 2012, 1:14 am

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The availability of mortgages with low rates is reducing in France, with many lenders increasing the cost of borrowing in the last month.

Head of operations at overseas mortgage specialist Connect Overseas Geoff Simmonds explained the cost of variable rate finance in the country has risen from 2.09 per cent to 2.79 per cent over the past four weeks.

However, he stated now is an opportune time for people to pick up property in France at a reduced cost, thanks to the strength of sterling against the euro.

"Overall, these are great times for bargain hunters, but I would caution buyers to source their borrowing needs in advance as the lending market is tightening," Mr Simmonds concluded. 

There is evidence more buyers are targeting the French real estate sector, with Trevor Leggett, managing director of Leggett Immobilier, recently revealing his firm experienced a 39 per cent rise in transactions during 2011.
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Mortgage numbers decline in France

November 4, 2012, 12:00 am

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The number of mortgages granted by French banks fell again in the third quarter, making it integral that those looking for property in France have their credit in order when applying for finance.

According to figures from the French Mortgage Watchdog, there was a drop of 23.3 per cent in the penultimate quarter of 2012, compared to 2011.

While there is traditionally an August slump in mortgages, the recovery that normally occurs in September was disappointing.

Michel Mouillart, professor of economics at the University of Paris-Ouest and author of the study, explained that the country has never faced a drop of the same magnitude and speed.

Nevertheless, the property market is still attracting British buyers, specifically in southwest France, the Global Property Guide reported.

Trevor Legget, chief executive of Legget Immobilier, explained that his firm has seen transactions in the area sour by around a third over the past two years.
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France remains attractive prospect for buyers

January 3, 2013, 11:00 pm

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French property will continue to be an attractive prospect for investors going into 2013, with low mortgage rates and rising demand levels driving activity. Mortgage specialists French Private Finance claim that there has been renewed interest in the market of late, as buyers submit mortgage applications to take advantage of current ultra low rates.

John Busby, director of the company, told Property Wire on December 21st: "This week alone we have sent quotes out over €15 million (£12.1 million approximately) of new purchases in the Alps at all different price points with viewings all confirmed. Now certainly is a good time to be buying with French mortgage rates at their all time historic lows and with loan to values of 80 per cent of the purchase price and effective interest rates from 2.4 per cent over 25 years."

Luckily for buyers, these rates are expected to continue this year and mortgage lenders are eager to do business with non-French residents.  "We are not anticipating any further changes to underwriting criteria," Mr Busby said. "There have been some positive noises about Europe recently with consumer confidence increasing so we can’t be sure these low mortgage rates will be around forever."

This signifies a positive change in the market, which should help to generate recovery. However, overall lending figures remain down. French Private Finance claims that in the penultimate quarter of 2012, banks were registering a strong decline, with lending down 24.3 per cent on the same period in 2011.

However, Mr Busby stressed to the news provider that this does depend on the market segment and the lender. For example, the Banque de France recorded a rebound of 21 per cent over a month in the number of French mortgages but experienced a reported drop of 34 per cent over the year.

"The beginning of the year recorded a sharp drop in demand but since September, in a context where borrowing has never been so inexpensive, demand has increased again thanks, in part, to an increase in borrowers re-mortgaging," Mr Busby  explained.
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Paris apartments still too expensive

April 25, 2013, 6:43 am

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High prices are denting interest levels for Parisian property , according to one property expert. Christine Perrissel, company director of Agence Etoile, told Bloomberg that at least one in four apartments in the city can't be sold. This is despite mortgage rates currently standing at record lows.

So why aren't more people opting for French real estate? After all, prices are high in London but demand remains constant. It seems the state of attrition reached in the Parisian property market is thanks to an unwillingness of sellers to lower values. "I have some inventory that’s too expensive and sellers don’t want to lower prices," Christine Perrissel told the news provider. "Buyers are just much more selective."

This isn't the first negative report of the French property market to emerge. At the beginning of April the Global Property Guide reported that the country is struggling to bring down its sky-high unemployment rate and budget deficit, which is having knock-on effects for the real estate sector. The National Institute for Statistical and Economic Studies recorded a 1.63 per cent fall in house prices in Metropolitan France for 2012 compared to 2011 levels. This is the third consecutive year of annual declines.

When adjusted for inflation, values dropped by 3.12 per cent, with a 1.27 per cent quarter-on-quarter rise in Q4. Sales volumes have also taken a hit, with data from La Chambre des Notaires de Paris reporting just 709,000 homes were sold across Paris last year. This is a fall of 12 per cent year-on-year.

The poor health of the market is partly due to the inactivity of first-time buyers. As in most of Europe, those looking to get a foot on the property ladder have remained constrained in France. Les Chambre des Notaires de Paris believes this is due to the end of the loan to zero ration and the percentage of transactions by purchasers under 30 years of age fell to 15.8 per cent of all sales in 2012.
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French property market proving 'attractive' for buyers

May 15, 2013, 7:12 am

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French property is increasingly becoming the subject of much interest, according to one expert. Leggett Immobilier, a leading international estate agency in France, explained that market conditions are attracting buyers to the country. During the first quarter of 2013, the company experienced a "steady increase" in investors and claims this is thanks to low mortgage rates and sensible pricing.

It is certainly true that conditions are becoming more and more favourable for buyers across the channel. Mortgages are now at their lowest level in 65 years and the recession has forced vendors and sellers to bring down property prices to more affordable levels. However, investors will still need the capital behind them to obtain French real estate as lending is still relatively constrained, mirroring conditions in the rest of Europe.

What's more, the property market isn't exactly in good health at the moment, although there are signs of improvement. Trevor Leggett, chief executive of Leggett Immobilier, commented: "We understand that the overall number of property sales in France fell by 20 per cent to 655,000 last year and that this year is likely to see a similar number of transactions. However, it's clear that many people are also convinced that the market will improve over the coming years and with the cheap money available that now is the time to buy."

He added that he has received "anecdotal evidence" that vendors are also becoming more realistic with their pricing, understanding that high values will not wash in the current climate. This was demonstrated by a recent sale by Mr Leggett's team in Brittany, in which two Parisian buyers arrived with financing in place, drove a hard bargain and gained a good value for money property.

However, it isn't just the French who have realised that there are bargains to be had in the French property market. "France has historically been the favourite destination of UK property buyers who love the sunshine, countryside and relaxed way of life," Mr Leggett stated. During A Place in the Sun Live last month, Leggett Immobilier in fact noticed a swath of Britons surprised by the value for money French property could offer them.
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