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France: it's time to drive a hard bargain

"For the natives, the party's over. But for Brits, plummeting house prices offer golden opportunities, says Chris Wilson

When they have the choice between putting their property on the market at a reasonable valuation or an inflated price, the French farmer normally chooses the latter.

French attractions: 'I know that prices will fall further in the next six months. They have to'

So says estate agent Monsieur Laquerrier of the De Coquereaumont estate agency in the Loire valley. "I tell them the price is too high but they say - and forgive me for mentioning it - that there's always another stupid Englishman along who will pay anything," he says.

He is a little embarrassed by his outburst to me, an Englishman, but he's telling the truth. Not so long ago, the canny peasants were right: the British were famous in France for paying exorbitant amounts of money for a pile of old stones without even negotiating. This profligacy fuelled a house-price boom in the French countryside that lasted for five years.

Not any more. The party's over. The estate agents say they are undergoing a period of "stabilisation", but poke a little deeper and you'll find that house prices are falling in France. The most recent figures from FNAIM, the national estate agents' organisation, suggests there has been a drop of 0.3 per cent nationally in country properties in July - and that's an average. In certain regions the fall will have been much greater and, as the agents themselves point out, August has been even worse."

http://www.telegraph.co.uk/property/main.j....xml&page=1

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Even in a rising market there will be the odd month where house prices fall from the previous month's high. I haven't looked at the indices but am condfident that if you compare them to same time last year you will see house prices have risen.

I take on board what article is saying about Brits paying inflated prices for old ruins and how British activity in area has an impact on their house price inflation.

I know you haven't said that French house prices are heading for a fall, but thought I'd throw in two reasons I think they will continue to rise:

1) Property in France is very affordable with such low mortgage interest rates. When I was looking around Xmas time I could get 4% fixed for 20 years at 80% LTV. Far better than I gt back here in UK.

2) The French are a nation of renters and the young tend to live with their parents for a long time. Surveys undertaken in past 2 or 3 years show that a growing proportion of French, particularly the young, are looking to own their own property rather than rent. This should push prices North.

I see France as a good slow burner in terms of house price inflation.

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Three things to consider about the French market compared to the UK

1. Not so easy to borrow money

- French banks want to see stable employment in France, ie more than 3 months.

- MEW not common

- No BTL mortgages

2. Inheritance tax

- Loi de succession. Many properties sold "cause succession" - ie they have to sell to pay the inheritance tax

- No husband-wife exemption (?)

- Inheritance tax very high for anyone without children

3. Law more in favour of the tenant

- Landlord has to give them 3 years (6 years if a company). Less for furnished rentals

- Difficult to evict for non-payment of rent. Impossible during winter months

The above may change though over time, especially if Sarkozy becomes president.

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Hi SamFermin

Agree with your 2nd and 3rd points. On the 1st, there are mortgages open to non French residents. I live and work in Britain. When I was looking at French leaseback property the assessment of what borrowing I could receive was based on my affordability (rental not included.) They took a proportion of my UK monthly income (think was about a third) then subtracted monthly credit commitments to ascertain what lmonthly payment I could afford. They then used term and repayment type to determine total lending they could extend to me.

Brokers will know about these more specialist mortgages if you require one. As mentioned above, mine would have been fixed at 4% on Capital Repayment basis over 20 years.

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Hi SamFermin

Agree with your 2nd and 3rd points. On the 1st, there are mortgages open to non French residents. I live and work in Britain. When I was looking at French leaseback property the assessment of what borrowing I could receive was based on my affordability (rental not included.) They took a proportion of my UK monthly income (think was about a third) then subtracted monthly credit commitments to ascertain what lmonthly payment I could afford. They then used term and repayment type to determine total lending they could extend to me.

Brokers will know about these more specialist mortgages if you require one. As mentioned above, mine would have been fixed at 4% on Capital Repayment basis over 20 years.

I am presently sitting on the fence about buying in France (specifically Villafranche or Menton) stuff is expensive and gone up a lot but if you do the sums (especially btl) it is still way better than the UK. I am also thinking that long term as more people can work remotely and are looking to leave the UK Fracne will be a good bet.

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House prices in France have risen YOY but a closer look at the figures shows that Paris and other cities account for much of this - certainly prices are falling in many rural areas with Brits looking to sell waiting months for a buyer to come along in many instances. I have seen more distress sales this year than at any time in the last 8 years.

What's more remember one thing about France - the French expect to hastle over price and laugh at Brits who naively pay the sticker price.

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House prices in France have risen YOY but a closer look at the figures shows that Paris and other cities account for much of this - certainly prices are falling in many rural areas with Brits looking to sell waiting months for a buyer to come along in many instances. I have seen more distress sales this year than at any time in the last 8 years.

What's more remember one thing about France - the French expect to hastle over price and laugh at Brits who naively pay the sticker price.

"You know nothing about what you are talking about. You need to look at this from a far distance, rather than from up close as you are doing".

Sorry Phillipa, I couldn't resist that. I'm sure you know what you are talking about. It's just that some people on here think that being local to the action means you can't see the bigger picture (like they can from afar) !

Be ready to be corrected by the experts who'll point out the error in your 'logic'.

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What's more remember one thing about France - the French expect to hastle over price and laugh at Brits who naively pay the sticker price.

I wonder, how did the Brits become the lughing stock of the entire property market?

It seems that everywhere the prices for Brits are higher than for everybody else. Brits pay high prices in p

places which had been well speculated by Italians, Spanish and germans...

I got the best prices when I communicated in Italian and not in English...

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"You know nothing about what you are talking about. You need to look at this from a far distance, rather than from up close as you are doing".

Sorry Phillipa, I couldn't resist that. I'm sure you know what you are talking about. It's just that some people on here think that being local to the action means you can't see the bigger picture (like they can from afar) !

Be ready to be corrected by the experts who'll point out the error in your 'logic'.

;)

I can only call it as I see it - I have close friends and family in France, some love it and will live there until they die, others want to come home for various reasons. I have also lived all over the world in my time so know a little about a lot of places and cultures. If others disagree with me that's fine - that´s what forums are for :)

I also spent a lot of the summer there looking at property as I like France (although not for business). Look in any estate agents and prices are falling in rural areas - a favourite with British buyers, but of little interest to the French in general.

We looked at one last year which was of interest at €299,000, but decided against it as it was a little too isolated. Getting on a bit and want to walk to a boulangerie in the morning if possible! A year on and it is still on the market - now at €235,000. A lovely British couple are selling it and chances are they paid far more for it in the first place than a French couple would have done.

The French love to bargain! They love deal making! Don't take their fun away from them Make them an offer and they will meet you half way.

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;)

I can only call it as I see it - I have close friends and family in France, some love it and will live there until they die, others want to come home for various reasons. I have also lived all over the world in my time so know a little about a lot of places and cultures. If others disagree with me that's fine - that´s what forums are for :)

I also spent a lot of the summer there looking at property as I like France (although not for business). Look in any estate agents and prices are falling in rural areas - a favourite with British buyers, but of little interest to the French in general.

We looked at one last year which was of interest at €299,000, but decided against it as it was a little too isolated. Getting on a bit and want to walk to a boulangerie in the morning if possible! A year on and it is still on the market - now at €235,000. A lovely British couple are selling it and chances are they paid far more for it in the first place than a French couple would have done.

The French love to bargain! They love deal making! Don't take their fun away from them Make them an offer and they will meet you half way.

In general would you advise to not use an English agent? We are specifically looking for an apartment and is it true that there is a central list (smiliar to the US) where all properties on the market are listed? Thanks,

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In general would you advise to not use an English agent? We are specifically looking for an apartment and is it true that there is a central list (smiliar to the US) where all properties on the market are listed? Thanks,

I have never had any problems with English estate agents in France as they are very well regulated - unlike in Spain. I actually use both French and English agents when looking. Asking prices should be the same across agents anyway although when prices change not all agents are notified.

Someone with more knowledge may know of a central list, but I have not heard of one. If you find one please tell me!

One thing you will hear a lot is that the French don't use surveyors. This is nonsense. They use Expert Immobiliers, professionals who value property and who often specialise in an area or type of property. I am amazed by the number of English estate agents in France who have never even heard of them so that's something to bear in mind if you need a valuation or survey.

I came across them when friends of mine were selling a house - three French couples pulled out of a sale because of problems raised by Expert Immobiliers. Too many Brits assume a notary is all that they need and of course estate agents are happy to go along with this.

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Whiterabbit. I agree that B2L is better in France than UK from an affordability perspective. That's part of the reason I was considering France - very easy to pay 30 or 40% and have property that will wash its face (cover capital repayment mortgage and various expenses.)

Philippa. You mentioned Expert Immobiliers. Unsurprisingly the surveyors I spoke to suggested assessment of Expert Immobiliers was inferior to thier own. One even went as far as to say they were just builders. (That dind't put me off, I'd rather have opinion of expert builder than a surveyor!) From your experience have Expert Immobiliers covered off everything you would expect in their reports or do you find problems when you have moved into property that you would have expected to have shown on their report?

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Whiterabbit. I agree that B2L is better in France than UK from an affordability perspective. That's part of the reason I was considering France - very easy to pay 30 or 40% and have property that will wash its face (cover capital repayment mortgage and various expenses.)

Philippa. You mentioned Expert Immobiliers. Unsurprisingly the surveyors I spoke to suggested assessment of Expert Immobiliers was inferior to thier own. One even went as far as to say they were just builders. (That dind't put me off, I'd rather have opinion of expert builder than a surveyor!) From your experience have Expert Immobiliers covered off everything you would expect in their reports or do you find problems when you have moved into property that you would have expected to have shown on their report?

Surveyors in the UK do you mean? Every survey I have ever had has seen the surveyor sitting on the fence and suggesting I get a builder in to check one thing or another anyway!

I'm not an expert on the differences between the two, but just wanted to point out the myth that the French never have properties surveyed.

As for Expert Immobiliers, they do have a great deal of building knowledge and one aspect of their job is to value a property as is and give you an estimated value after any work you plan is done. But they are a profession and are used by banks, courts, etc., just as surveyors might be in the UK.

There is also a law in France that property sellers cannot cover up or fail to disclose faults that you would know about the property.

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Whiterabbit. I agree that B2L is better in France than UK from an affordability perspective. That's part of the reason I was considering France - very easy to pay 30 or 40% and have property that will wash its face (cover capital repayment mortgage and various expenses.)

If I could find a decent flat in the SE and the rent (weekly during the season) after all expenses covers 50% of the mortgage I will be very happy. That way in a few years when I need to use the flat more myself I will have built up some equity and hopefully won't be under so much pressure. We figure on spending about 350 euros on a 2 bed in Nice or along the coast form there towards Italy.

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Good luck with your hunt WhiteRabbit. I didn't get as far as Nice on my two forays into France a few months back, but your expectations sound realistic for a property in that region. I like the idea of looking where you are considering - I love French and Italian food!

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Good luck with your hunt WhiteRabbit. I didn't get as far as Nice on my two forays into France a few months back, but your expectations sound realistic for a property in that region. I like the idea of looking where you are considering - I love French and Italian food!

Yes a good reason for me to buy there is proximity to Italy especially the lakes and Milan (where there is high paid work!).

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L'immobilier n'a pas encore atteint son maximum

Les dernières statistiques du marché de l'immobilier, publiées mardi, notent une poursuite de la hausse des prix. Celle-ci est toutefois de moins en moins rapide, ce qui incite les professionnels à croire à un "atterrissage en douceur".

Le marché de l'immobilier n'a visiblement pas encore atteint son sommet. D'après une salve d'indicateurs publiés mardi, les prix poursuivent leur hausse, même si cette hausse est moins rapide que précédemment. D'après l'indice « Insee/Notaires », sur l'ensemble du territoire, neuf et ancien confondus, les prix ont en effet progressé de 12,6% au deuxième trimestre, par rapport à la même période de l'année précédente. Au premier trimestre, la hausse était plus proche des 15%. Pourtant, pour l'Insee, « le rythme de croissance reste élevé ». La Fnaim note elle aussi que l'activité continue de progresser, avec des volumes de transaction en hausse de 2,6% au troisième trimestre sur l'ensemble du territorie. Elle assure que ses statistiques « déjouent les scénarios de retournement de conjoncture si souvent pronostiqués », mais admet que les prix s'assagissent. Ils devraient ainsi augmenter de 7% au maximum en 2006, alors que la hausse avait atteint 10,3% en 2005 et 15,5% en 2004. Pour autant, elle continue de qualifier le marché de « solide », avec toutefois de grandes inégalités régionales. Le Nord et à l'Ouest se caractérisent par de fortes hausses des prix et de l'activité tandis que le sud-est et le sud-ouest connaissent un fort ralentissement.

L'Île-de-France reste la région où la hausse est la plus marquée. C'est notamment le cas dans la grande couronne avec des flambées à plus de 23% à Chelles et Juvisy, voire à plus de 30% à Sevran, selon la FNAIM. Pour sa part, la Chambre des notaires fait état, pour le second trimestre, d'une hausse des prix de 12,5% sur un an dans l'immobilier ancien à Paris. Mais elle constate aussi une baisse des transactions. Elle pronostique donc « une progression annuelle à un seul chiffre pour l'ensemble de l'année 2006 », une telle évolution étant « plus compatible avec [celle] des revenus des ménages, dont les besoins en logements restent considérables ». Moyennant quoi, elle écarte elle aussi tout risque de baisse brutale des prix pour privilégier, comme la FNAIM, le scénario de « l'atterrissage en douceur ». D'après elle, la demande devrait continuer à bénéficier de nombreux moteurs malgré le niveau élevé des prix (ils ont progressé de 87% depuis 2000). Et de citer pêle-même l'aspiration des Français à être propriétaire de leurs logements, le faible niveau des taux d'intérêt et l'allongement des crédits immobiliers... D'après la société de courtage Meilleurstaux.com, les prêts à 25 ans, qui représentaient 2,2% des dossiers acceptés en 2002, sont ainsi passés à 29,8% en 2006.

speaks for itself.

Bargain in the country but not in Paris yet!!

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Thanks Picnic. On translation, though Google, this gives:

The real estate did not reach its maximum yet. The last statistics of the market of the real estate, published Tuesday, note a continuation of the rise of the prices. This one is however less and less fast, which encourages the professionals to believe in a “landing carefully”. The market of the real estate obviously did not reach its top yet. According to a salvo of indicators published Tuesday, the prices continue their rise, even if this rise is slower than previously. According to index “INSEE/Notaries”, on the whole of the territory, new and old confused, the prices indeed increased by 12,6% in the second quarter, compared to the same period of the previous year. In the first quarter, the rise was closer to the 15%. However, for INSEE, “the rate of growth remains high”. Fnaim also notes it that the activity continues to progress, with volumes of transaction in rise of 2,6% in the third quarter on the whole of the territorie. It ensures that its statistics “thwart the scenarios of reversal of economic situation so often forecast”, but admits that the prices were assagissent. They should thus increase by 7% to the maximum in 2006, whereas the rise had reached 10,3% in 2005 and 15,5% in 2004. For as much, it continues to qualify the market of “solid”, with however of great regional inequalities. North and in the West are characterized by big rises of the prices and activity while south-east and south-west know a strong deceleration. Island-of-France remains the area where the rise is marked. It is in particular the case in the large crown with blazes with more than 23% with Chelles and Juvisy, even with more than 30% with Sevran, according to FNAIM'S. For its part, the Room of the notaries makes state, for the second quarter, of a rise of the prices of 12,5% over one year in the old real estate in Paris. But it notes also a fall of the transactions. It thus forecasts “an annual progression with only one figure for the whole of the year 2006”, such an evolution being “more compatible with [that] of the incomes of households, for which the requirements in residences remain considerable”. In consideration of which, it draws aside it also any risk of brutal fall of the prices to privilege, like the FNAIM, the scenario of “the landing carefully”. According to it, the request should continue to profit from many engines in spite of the high level of the prices (they increased by 87% since 2000). And to quote pêle-même the aspiration of the French to being owner of their residences, the low level of the interest rates and the lengthening of the loans on real property… According to the company of Meilleurstaux.com broking, the loans at 25 years, which accounted for 2,2% of the files accepted in 2002, thus passed to 29,8% in 2006.

Its all a bit scrappy and it isn't clear how calculations are made, but message is clear. Prices are, on average, going North though in most areas the speed at which they are going North is reducing. Also clear more and more french people want to own property rather than simply rent.

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Guest X-QUORK

My folks are looking to buy a small pied à terre in Bordeaux city, in fact they're over there right now looking at properties. I don't think they're looking at it as much of an investment, just as a nice place to stay and soak up French culture.

If anyone knows anything about the market in that area I'd be grateful for any info. My main concern being that they might get burnt if prices slide.

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Here are some good points made by an ex estate agent in the Cote d'Azur on another forum. Quote....

1) There's an awfull lot of property for sale here. Or to put it another way: There's a lot of awfull property for sale here! If you take three criteria: Well placed, well built and correctly priced, there isn't actually much on the market that can meet all three. Those properties sell quickly.

2) Agents here do not do anywhere near the volume of business that agents in the UK do. Also running a business here is far more costly than the UK. Hence fees are higher.

3) The market in the UK is totally different to here. In the UK 90% of properties are sold through an agent who has either sole listing or joint listing and is therefore motivated to make a brochure and advertise extensively. here, only about 50% of properties are sold through agents, and typically the seller will hawk it out to five or more agents who are all in competition with each other. This means that each agent knows there is an 80% chance that he WILL NOT be the one to make the sale, hence cannot afford to spend too much time and effort marketing a property under those terms. He could spend the time and effort making an expensive brochure only to find someone else had sold the property before the brochure was printed. And he's left with paying his costs.

4) In France owners tend to dictate their net price to the agent where as in the UK the market is dictated more by professional advice. This explains why there are so many illogical discrepancies here.

5) There is far less speculation here mainly because the French are not raised on the notion of property speculation and also because the acquisition costs are much higher than in the UK. This means you need to hold a property longer in order to make a capital gain that covers these costs in order not to make a loss when selling.

6) In terms of property values, as everywhere else these follow a sinusoidal curve, and timing timing timing is just as important as position position position. In France the dizzy heights and dismal lows are never as accentuated as in the UK, mainly due to the lack of the same level of speculation.

7) There are three prices for a property. a) The owner's sentimental value that he will not drop below. Maybe he's put his heart and soul in creating what he perceives as a "bijou" and will not sell for less. B) The surveyors price based on replacement value. this is probably the most objective figure. c) How much a buyer is prepared to pay. at the end of the day, only this price really counts.

8) Are prices too high here? For me there are two yardsticks. First, could you buy land and build for less than the asking price? If not, then the market is not too high. Secondly, if you can sell a semi in the S.E of England and buy detached here and still have money in your pocket, then the market here still represents good value.

end quote

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If you are looking for property on the Riviera, I would recommend www.medinheaven.co.uk. The director, Phillip, is half-French, half-English. They have great properties and are free.

I live in Nice myself. Great place to be. I bought my apartment from these guys before. Property in Nice is cheaper than you may think. A one-bed in the Old Town in Nice can be had for about 120k euros.

It beats Chelsea anyway!

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If you are looking for property on the Riviera, I would recommend www.medinheaven.co.uk. The director, Phillip, is half-French, half-English. They have great properties and are free.

I live in Nice myself. Great place to be. I bought my apartment from these guys before. Property in Nice is cheaper than you may think. A one-bed in the Old Town in Nice can be had for about 120k euros.

It beats Chelsea anyway!

We just came back and to be honest I couldn't see anythig decent for under 350k or so that had room for a double bed and parking. I will check out the site you mentioned.

We may now by inland a few miles................

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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