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tomandlu

French House Prices

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In "Whoops", Lanchester states the following (pardon any typos - and last sentence included just because I thought it was interesting):

In France, it's even more strict (the Germany). For a start, our model of the mortgage, in which the loan is keyed to the value of the house being bought, doesn't apply. In France, it's the other way around. The critical figure is not the value of your property but the size of your income. Banks will lend only the money you can reasonably afford to pay back out of your monthly paypacket. In practice, that figure has been assessed as being a third of your gross income. So a bank will lend only a third of what you're earning - and if the bank stretches the rules and you get into trouble paying it back, the bank can be sued for reckless lending. It's the bank which bears the respnsibility for your not borrowing stupid amounts of money. Linked to this is the fact that attitudes to debt are diffeent. For instance, there are no cheque-guarantee cards in France, and if that sounds as if it implies a happy-go-lucky, carefree attitude to money, the exact opposite is true: there are no cheque-guarantee cards because it is a criminal offence to write a cheque for more money than you have in your account.

So, if this is all true, how come France had an HPI-fest?

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In "Whoops", Lanchester states the following (pardon any typos - and last sentence included just because I thought it was interesting):

So, if this is all true, how come France had an HPI-fest?

Because it's only true in theory.

I know someone who has just signed up for a 3 bedroom duplex in France near to Geneva, 100% finance deal, no deposit required.

This guy doesn't make much money.

I took it as a warning sign, trouble is coming when 100% finance deals are around.

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In "Whoops", Lanchester states the following (pardon any typos - and last sentence included just because I thought it was interesting):

So, if this is all true, how come France had an HPI-fest?

This is technically how Britain was in the early 1980s but American Bank culture arrived in France like any other nation and the facoured few with contacts were granted loans to build huge developments. They then convinced banks to lend of similar terms that we see in Britain probably via offshore entities or foreign bank branches. Although I would say that most the HPI in France came from US/UK where people were allowed to borrow huge sums and invest in foreign property. How many people did you hear of in 2003-2008 who were buying French Barns and "doing them up" to either sell on or live in - you couldn't lose!!!

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How many people did you hear of in 2003-2008 who were buying French Barns and "doing them up" to either sell on or live in - you couldn't lose!!!

I did wonder about this, but (and ignoring Paris probably) just what percentage of the market was made up of foreign buyers? Was it really enough to affect the market as a whole?

(edit to add) To clarify, foreign buyers might drive prices, but local buyers would still need access to credit, making the first part of your post the more critical aspect.

Edited by tomandlu

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So, if this is all true, how come France had an HPI-fest?

What Swissy has said is true but controls are still stricter so loose lending must be less of a factor in France.

The boom really started post 2001 when French small investors moved money out of the stock market into BTL. There were lots of tax breaks (Besson, loi Robien, loi Scellier etc.) to encourage lending for student flats, family apartments and holiday rentals.

In the west it must be pretty much foreign buyers who bid up prices, because now they've gone prices have dropped 30-50%. Foreign buyers tended to favour different property to locals (barns as opposed to small, cheap new build). Given the pretty much flat state of the economy in these rural backwaters once the prop of foreign buyers vanished prices dropped.

In other areas prices started from a pretty low base so even keeping within lending criteria they had room to increase.

With jobs concentrated in certain areas: Paris, Rhone-Alpes etc these areas have experienced a boom as either investors or owner-occupiers have bid up prices. I suspect OO have either seen wives go out to work (less common in France) or have borrowed from the bank of mum and dad to finance purchases. I also suspect the less active nature of the French housing market (fewer transactions) along with lack of transparency over house prices distorts the market.

These are just some ideas, the market is not very transparent.

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Yes, check out some of Redwine's comments in the French property thread before you get carried away with any of those.

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Please keep it quiet by removing that link!

It would not be nice to find the BTL/investor brigade have sucked everything up before we get to move there...

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Link(s)?

http://www.housepricecrash.co.uk/forum/index.php?showtopic=83406

It's a very long thread, lots of crap but in summary, I agree with his recent points that going to live in a French village is a much more potentially difficult step than people think. Get it wrong and you will end up in an expensive episode of the League of Gentlemen with a French accent.

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http://www.housepricecrash.co.uk/forum/index.php?showtopic=83406

It's a very long thread, lots of crap but in summary, I agree with his recent points that going to live in a French village is a much more potentially difficult step than people think. Get it wrong and you will end up in an expensive episode of the League of Gentlemen with a French accent.

Quite a few webbed feet types around where I live but the bonus is that unlike in the UK I can have a couple of fields between me and the nearest one for half the cost of a 2 bed mid terraced in chavtown with the risk of inconsiderate neighbours.

Edited by campervanman

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http://www.housepricecrash.co.uk/forum/index.php?showtopic=83406

It's a very long thread, lots of crap but in summary, I agree with his recent points that going to live in a French village is a much more potentially difficult step than people think. Get it wrong and you will end up in an expensive episode of the League of Gentlemen with a French accent.

I admired the couple in question for having the courage to go and explain there situation to a local French newspaper knowing that the neighbours would probably be reading what they said.

Today to come and live in France you would have to have a job which i doubt in rural France or you would have to be over 65 years old with a good pension and with your S1 form for your healthcare and you also have to pay for a private top up at least you have no worries for your healthcare thats if the laws don't change.

Your needs at 65 years old may not be the same when you are 75 years old and retirement homes are expensive in France.

A young couple with two children who buy a cheap house in the middle of nowhere have no chance of making a living i would count lets say at least 10,000 euros a year in private healthcare.

Then you have your council taxes income tax etc to pay not forgetting that you have to fed and cloth the family and heat your home and how do you do this when you have no job living in the middle of nowhere ?

So if your working in the UK and you have free healthcare with the wife and kids its really pointless packing everything in just for the sake of cheap house in the middle of nowhere.

Suicide rates and depression are high in rural France and that last Sundays first round election results show a historic breakthrough for the Front National in rural France and in many big towns.

Not everybody wants to live in an isolated house where the nearest neighbour is a few miles away only isolated people live in rural isolation if there was an emergency you could just die and nobody would know about it for a few months or a couple of years and this does happen quite often in rural isolated villages in the middle of nowhere where nobody today wants to go to live.

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Suicide rates and depression are high in rural France and that last Sundays first round election results show a historic breakthrough for the Front National in rural France and in many big towns.

Not everybody wants to live in an isolated house where the nearest neighbour is a few miles away only isolated people live in rural isolation if there was an emergency you could just die and nobody would know about it for a few months or a couple of years and this does happen quite often in rural isolated villages in the middle of nowhere where nobody today wants to go to live.

My parents did this. Thankfully they were very well pensioned but why they thought it was a good idea to go live in the middle of nowhere is beyond me. Yes they had nice summers in Charente (if you ignore the blistering heat, especially that summer which killed off thousands of pensioners) but if could be blooming miserable and cold in wet in winter. Luckily they were well pensioned, but the supermarket was a major expedition.

My father has a lot to answer for IMO. My mother died en route to the hospital as it was so far away.

Edited by aSecureTenant

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I admired the couple in question for having the courage to go and explain there situation to a local French newspaper knowing that the neighbours would probably be reading what they said.

Today to come and live in France you would have to have a job which i doubt in rural France or you would have to be over 65 years old with a good pension and with your S1 form for your healthcare and you also have to pay for a private top up at least you have no worries for your healthcare thats if the laws don't change.

Your needs at 65 years old may not be the same when you are 75 years old and retirement homes are expensive in France.

A young couple with two children who buy a cheap house in the middle of nowhere have no chance of making a living i would count lets say at least 10,000 euros a year in private healthcare.

Then you have your council taxes income tax etc to pay not forgetting that you have to fed and cloth the family and heat your home and how do you do this when you have no job living in the middle of nowhere ?

So if your working in the UK and you have free healthcare with the wife and kids its really pointless packing everything in just for the sake of cheap house in the middle of nowhere.

Suicide rates and depression are high in rural France and that last Sundays first round election results show a historic breakthrough for the Front National in rural France and in many big towns.

Not everybody wants to live in an isolated house where the nearest neighbour is a few miles away only isolated people live in rural isolation if there was an emergency you could just die and nobody would know about it for a few months or a couple of years and this does happen quite often in rural isolated villages in the middle of nowhere where nobody today wants to go to live.

In our village we have an Englishwoman with a daughter who manages to make a living and keep a roof over her head as a travelling hairdresser. Tere are other pre retired people who work for themselves as "auto entrepreneurs" in a variety of types of employment where social charges for healthcare can be very low. If you want a UK lifestyle then France isn't for you but if you want a slower more relaxed lifestyle then I can't see how you could be worse off than living as a UK debt slave.

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If you want a UK lifestyle then France isn't for you but if you want a slower more relaxed lifestyle then I can't see how you could be worse off than living as a UK debt slave.

Just don't tell too many people... ;)

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In our village we have an Englishwoman with a daughter who manages to make a living and keep a roof over her head as a travelling hairdresser. Tere are other pre retired people who work for themselves as "auto entrepreneurs" in a variety of types of employment where social charges for healthcare can be very low. If you want a UK lifestyle then France isn't for you but if you want a slower more relaxed lifestyle then I can't see how you could be worse off than living as a UK debt slave.

I met a couple who had set up a brasserie somewhere out your way - again they were auto-entrepreneurs and earned enough for healthcare and to keep their pension previsions up to date. Near Ruffec I spotted a "pie shop" which apparently attracted the French from miles around, it only opened a few nights of the week. Again owned by British or Irish. There are quite a few mobile fish and chip vans that do good business too. It is not impossible to work for the French too. Quite a lot of the PMEs out west (that haven't shut) employ Brits. So it is not altogether hopeless for pre-retired people but you need to have a plan, or speak French.

There are changes to the auto-entrepreneur status coming but you can always be self-employed although the charges are higher.

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I met a couple who had set up a brasserie somewhere out your way - again they were auto-entrepreneurs and earned enough for healthcare and to keep their pension previsions up to date. Near Ruffec I spotted a "pie shop" which apparently attracted the French from miles around, it only opened a few nights of the week. Again owned by British or Irish. There are quite a few mobile fish and chip vans that do good business too. It is not impossible to work for the French too. Quite a lot of the PMEs out west (that haven't shut) employ Brits. So it is not altogether hopeless for pre-retired people but you need to have a plan, or speak French.

There are changes to the auto-entrepreneur status coming but you can always be self-employed although the charges are higher.

Yes my parents lived near Ruffec so know it well and like that area a lot.

Edited by aSecureTenant

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Yes my parents lived near Ruffec so know it well and like that area a lot.

Was the weather much better than the U.K for most of the year?

The charts seem to suggest the La Rochelle region to be about the best. Apart from the south east region obviously, but we all know the issue down there.

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In our village we have an Englishwoman with a daughter who manages to make a living and keep a roof over her head as a travelling hairdresser. Tere are other pre retired people who work for themselves as "auto entrepreneurs" in a variety of types of employment where social charges for healthcare can be very low. If you want a UK lifestyle then France isn't for you but if you want a slower more relaxed lifestyle then I can't see how you could be worse off than living as a UK debt slave.

http://www.lesechos.fr/economie-politique/france/actu/0203399483078-chomage-nouvelle-claque-pour-le-gouvernement-659954.php

French gvt unemployment figures that were published today at 6 pm .

Febuary 2014 another 31,500 french signed on at the jobcentre a new record of +3,35 million.

Over a thousand French everyday last month were made unemployed and had to go on the dole.

You would need your head looking at if you are working in the UK just to end up on the dole in France.

The auto employer scheme was set up as a way of earning a few bob on the side.

Such as giving a few english lessons a few hours a week so that it would put an end to being on the' black 'for those in full time work who already have health care.

What do these pre retired old aged pensioners do ?

How much do they pay in national insurance stamps you have to be able to pay so you have to make some sort of profit ?

How much do they pay for the healthcare what do you call cheap ?

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Was the weather much better than the U.K for most of the year?

The charts seem to suggest the La Rochelle region to be about the best. Apart from the south east region obviously, but we all know the issue down there.

Yes it was milder obviously. My parents originally hoped they needn't bother with central heating when they moved in, and could rely on log fires. However after a few winters, they put propane CH in. Summers were very hot, though when I visited in winter it seemed to be raining a lot of the time. Did seem quite lonely and remote, very agricultural. They did have some wild storms though, which caused some damaged to the roof, garden, Sky dish etc.Nearest supermarket run was Ruffec or Angouleme.Nearest shops Villefagnon or Chef Boutonne

Edited by aSecureTenant

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http://www.lesechos.fr/economie-politique/france/actu/0203399483078-chomage-nouvelle-claque-pour-le-gouvernement-659954.php

French gvt unemployment figures that were published today at 6 pm .

Febuary 2014 another 31,500 french signed on at the jobcentre a new record of +3,35 million.

Over a thousand French everyday last month were made unemployed and had to go on the dole.

Maybe they find living in the country on benefits quite attractive?

Building up their sustainable home (with land)...

With a bit of planning, innovation and what really matters in life...what wins out...a more frugal/sustainable life in France (+ others) or being a debt slave in the grey and wet U.K?

Many are starting to ask themselves...who/what/where do they really want to be!?

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Yes it was milder obviously. My parents originally hoped they needn't bother with central heating when they moved in, and could rely on log fires. However after a few winters, they put propane CH in. Summers were very hot, though when I visited in winter it seemed to be raining a lot of the time. Did seem quite lonely and remote, very agricultural. They did have some wild storms though, which caused some damaged to the roof, garden, Sky dish etc.Nearest supermarket run was Ruffec or Angouleme.Nearest shops Villefagnon or Chef Boutonne

Interesting, thanks for the reply. I guess a lot of planning/research and finding a group of like minded people would really help.

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If you want a UK lifestyle then France isn't for you but if you want a slower more relaxed lifestyle then I can't see how you could be worse off than living as a UK debt slave.

I did a whistle stop tour of SW France a few years ago, with the vague idea of looking for a super cheapo barn/cottage to convert. It felt like I'd died & gone to heaven. Romantic ruined villages atop cloud capp'd mountains everywhere. Empty roads. Butterflies in November ......

And the French seemed to have got it right, Good food, good wine, family, l'amour (well, not that I saw any, but you know what the French are like). Definitely work (if necessary) to live, not live to work.

One oddity was that, despite the empty roads, you'd occasionally come across wrecked 2CVs by the side of the road. Something to do with the Good Wine bit perhaps?? .....

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In "Whoops", Lanchester states the following (pardon any typos - and last sentence included just because I thought it was interesting):

It's not entirely correct though, cheque guarantee scheme was removed in the UK in 2011.

In France a cheque has a similar legal status to cash. In the UK, cheques are still primarily governed by the bills of exchange act 1882. The 1992 cheque act allowed banks to pre-cross cheques so that they cannot be signed over to a 3rd party, and the 2007 changes to timescales tightened up how cheques can be bounced... so UK cheque clearing has actually become progressively tighter, not more lax.

There is a treasury consultantion underway at present to further accelerate clearing and move to virtual rather than physical exchange.

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