Who is Buying and Where?
The luxury French market, in particular resorts in the Alps and on the Côte d'Azur, is truly international. Overall though, Britons remain the largest foreign group of buyers, now accounting for around a quarter of non-resident purchases.
The Property Market in France
Incredibly cheap mortgages, a stronger pound and stagnant property prices have caused a snowballing resurgence of Brits snapping up homes in France.
According to a government backed index, the number of property resale transactions in France rose 9.2 per cent year-on-year to the end of June 2014, while prices slightly dropped compared to 2013 but are beginning to rise slightly in 2014.
"2014 has been an excellent year for us with sales increasing by around 45 per cent over last year," said Trevor Leggett, Chairman of Leggett Immobilier. "British buyers are certainly back with a bang - unlike those from continental Europe where demand remains sketchy."
"Buyers are finding that property is well priced as vendors have become more realistic with their pricing. We don't see a huge change in prices over the coming 12 months - France has a stable housing market that doesn't see the dramatic rises and falls of other countries."
Similarly, MD at Sextant Properties Matthieu Cany quotes a 30 per cent increase in British interest in 2014, adding that "the majority of our clients are looking for holiday homes with lovely rustic features that are in need of a bit of updating.
Today's typical British buyer is spending between €200,000 and €300,000 on a resale property, but in the Alps, on the Côte d'Azur and in Paris this is higher.
Leggett continues: "We've been selling plenty of country houses and have noticed that sales have spread from the bottom end, namely sub €150,000, where demand never really went away through to the mid-market bracket of €250-€400,000. And demand is all over France, not particularly focused on any one region or type of property.
Sextant Properties notes the Limousin as a hot spot in 2014, thanks largely to the choice of properties there for around €100,000 - cheaper than in the Dordogne just south. "You get great value for money in this area and many clients have enough space for horses," says Cany. "Access is very easy with flights between Limoges and the UK.
The Languedoc in the south has a growing following of expats but another region to watch is Poitou-Charentes, with 280 miles of coastline, which includes the seaside town of La Rochelle, and a choice of pretty inland villages.
It is a natural progression from the traditional Brit spots in the south of France," says Cany. "Brits here are spending considerably less for properties than in the Côte d'Azur and having a lot more land to show for it.
The cost of buying property rose marginally in most of France in 2014, after a new law enabled councils to raise the 'droits de mutation' tax - which forms part of the notary's bill - by 0.7 per cent of the sale price.
Most councils chose to implement the rise, which means the total cost of buying in France is now 8-9 per cent of the purchase price.
French Mortgage Rates
French mortgages are currently as cheap as they've ever been, with interest rates starting around 2.5 per cent, depending on whether the rate is fixed or variable.
Repayment and interest-only are available, with LTV typically 80-85 per cent. Terms vary depending on the size of the loan, which often must be a minimum of €50,000 or €100,000.
Key Trends and Statistics
- Brits spearheading renewed interest
- Huge stock of great value character homes
- Average prices remain flat
- Once-in-a-lifetime low mortgage rates
- €200K-€300K largest market sector
(This article was first published in A Place in the Sun magazine - Issue 120)