Eurostar already runs trains into Paris from London, however the addition of new French destinations could be good news for overseas property investors who have already purchased in France. The extra routes would likely see an increase in tourism in the local areas and therefore help stabilise and improve local rental and sale prices due to extra demand.

Eurostar are working hard to improve and extend the services that they offer. They are currently attempting to forge partnerships with a range of organisations and services in their current destination cities to ensure that passengers can make the most out of their trips.

One of the latest Eurostar offerings is the Eurostar Plus. This allows their passengers to enter top London, Brussles and Paris galleries and museums on a two-for-one deal.

These deals and offers are again good news for French property investors in the local areas as they encourage tourism in the area, driving up demand and therefore ensuring that the proeprties are rented most of the year ruond and ensures both the rental and property sale markets are buoyant.

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Statistics compiled by INSEE (National Institute for Statistics and Economic Studies in France) from the country’s most recent census show that 20,500 of the 135,000 Britons living in France have their permanent home in or close to the Capital.

Paris has also been voted the 2nd ‘favourite holiday destination’ for 2011 in the Frommer’s travel guidebook series global poll.

Over 30 million visitors arrived in Paris in 2009 and the British love affair with the city of romance has been further accelerated by the speedy and frequent Eurostar services direct from London.

Not only a tourist destination however, Paris is one of Europe’s premier business centres with 900,000 business meetings held in Ile de France each year generating massive demand for quality accommodation in the city.

Real estate is a highly sought after gem in Paris and the French property specialists at Experience International have an exceptional opportunity for investors to purchase in the first new build development in central Paris since 2006 close to the Gare de Lyon and Bastille.

Rue de Reuilly has just been launched offering buyers studio and 1 bed apartments with 18 years guaranteed returns and 99% LTV finance on a secure government scheme.

Priced at just €214,000, for more information, please contact Experience International on 0207 321 5858 or visit www.experience-international.com.

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Covering some 930km, where the river Rhône meets the Mediterranean Sea, La Camargue occupies a coastal area between the Languedoc-Roussillon and Provence. Established as a national park and nature reserve in 1972, La Camargue contains exceptional bio-diversity with over 400 species of birds including the ubiquitous pink flamingos, the famous Camargue horses, unique breeds of bulls and now a new eco-friendly leaseback development.

Steven Worboys, MD of Experience International, the leaseback property experts, comments, “La Camargue remains one of the most unspoiled natural areas in the south of France. Already an established tourist destination with the French, the area is fast becoming popular with British holidaymakers and second property buyers not least due to the diverse fauna and flora, stunning vistas over the Rhône delta and ease of access from the UK and by air, rail and road.”

Due to its national park status, property development is limited in La Camargue with only a handful of truly eco-friendly properties available to purchase. One such development is the new Domaine des Flamants Roses leaseback residences. The 1, 2 and 3 bedroom cottage style properties are situated in the small charming village of Salin-de-Giraud, a stone’s throw from the chic coastal resort of Saintes-Marie-de-la-Mer and only 25 miles from historic Arles city centre.

Complimenting the natural landscape, Domaine des Flamants Roses is highly eco-friendly boasting an ecological rating of 145 out of 150 due to the use of recycled materials, natural building products, renewable energy and waste water recycling.

As Steve Worboys goes on to remark, “It’s not often that a property can truly be both eco-friendly and a good investment however Domaine des Flamants Roses ticks both boxes. As a leaseback property, owners can enjoy 4.08% guaranteed rental income for 18+ years as well as personal usage options.”

Prices start from €155,292 with a low deposit of only €1,000 required to secure a unit; in addition 100% finance is available, an attractive option which is becoming increasingly rare as French banks look to restrict lending.

For more information on buying property in La Camargue please contact Experience International on + 44 (0) 207 321 5858 or visit www.experience-international.com.

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However many investors are now looking to buy again although many are looking to buy properties in established markets which appear to be relatively stable – and France, with it’s fairly stable property market and solid financial system appears to be heading up the list.

British buyers in particular appear to be quite keen on French property, however instead of mortgaging their own homes, they are looking for Euro mortgages. This is partly because many are hoping to stretch their cash further as, if expected, the pound starts to strengthen against the Euro in the long-term. At present, the Euro/sterling exchange rate is fluctuating however many financial experts believe that the sterling is undervalued and will rise again in the medium-term.

Overseas property investors are still able to take out Euro mortgages in France where banks are happy to lend to foreign investors – unlike their counterparts in Spain and Greece who have been hit hard by defaulting customers. It is still possible to borrow 100% of the property price, although a LTV ratio of 85% will generally see a much better rate of interest.

Despite having a relatively stable property market, prices have fallen across France by around 15% from their peak so there are plenty of excellent properties to choose from. Properties away from hotspots such as in the Riviera offer great value for money however they may take a lot more marketing and drive to rent out on a regular basis.Properties in hotspots are, of course, higher however they will be easier to rent out on a regular basis.

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The Office of the Mayor of Paris has stringent rules that now demands that property investors who let out their Parisian properties pay for affordable housing equal in size and similar in location and style to that which they are renting out. These rules have led many buy-to-letters to keep their buy-to-let propeties unofficial – any holiday property which is let out should be given government permission ahead of the start of the property’s lettings.

Many foreign property investors have recently become interested in Paris as a potential investment destination as prices in central arrondissements have doubled in the past five years and property was cheap compared to other capital cities. Rental yields tend to be good with most netting around 5%, although some owners have reported yields of up to 9% on their portfolio.

It is unsurprisng that Paris remains a popular choice with it’s beautiful architectural charm. Many Paris properties have immense wooden doors opening onto stone courtyards, with winding stairways and tiled passageways, and these give off an air of romance and mystery. There is very little in the way of new building going on in Paris as space for new projects is at a premium, however some derelict sites on the edge of the city are being torn down to make way for modern apartment blocks. However older properties still drive the market thanks to their quaint charm and history.

Many property owners – both local and foreign – have tended to ignore the requirement to register the change of use on their properties and the issue was rarely enforced unless local residents compalinged. However the new rules, which follow concernts about the affordability of properties in locations which are favoured by the wealthy, and the scale of the penalties, has worried many property investors.

To get around the rules, some investors are trying to think out of the box – some properties are now empty, no longer rented to anyone, foreign or local; other property investors are looking to set up co-operatives to provide social housing nearby; some property investors are looking into renting their property investments to students, which would satisfy the affordable housing rules.

So in short, if you own a holiday let in Paris, it’s time to revisit your property and decide what you want to do with it – ensure that you are fully compliant with local laws, or perhaps try another option and see whether the enforcements really do come into practice or not.

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This is an evolution of the traditional hybrid mortgage structure in France, which sets out an interest-only period for a number of years followed by a defined repayment period until the end of the loan. The minimum loan amount for the product is €300,000 and within that the minimum level for the interest-only portion is €100,000.

The loan is targeted at higher net worth individuals, who must be able to show assets in stocks, investments or property totalling at least 150% of the loan amount (e.g for a €300k loan, borrowers must have €450k in net equity across their portfolio). The loan is available at 85% for second homes and practically 100% for new build leaseback properties.

John Luke Busby, director of Athena Mortgages, comments:
“This mortgage is completely new for France and a real innovation at this level of borrowing. The flexibility offered means borrowers can set a target payment amount that is somewhere between the low cost offered by an interest-only mortgage and the higher cost of a repayment mortgage. The mortgage also acts as a hedge on the investment, enabling equity to be built up as a portion of the loan is repaid.”

Matthieu Cany, managing director, French estate agents network, Sextant Properties, adds: “The hybrid structure is perfect for investors who don’t fancy the interest-only route but who wish to avoid the monthly shortfall with a repayment mortgage. It really fills a gap in the French mortgage market.”

An example calculation for the mortgage using €300k loan with rates of 3% gives:

Repayment: €1422
Interest-only: €750
Hybrid 50/50 split: €711 (Repayment over 25 years) + €375 (Interest-only) = €1086

Athena Mortgages is a specialist French mortgage broker offering French mortgages from a large panel of French lenders. An integrated team of multilingual professionals, with twenty years of experience in buying French property, helping thousands of non-residents and ex-pats find the right mortgage, release equity in their French home, or remortgage their property, from abroad.

Offering the highest level of service, Athena Mortgages bring a human face to a process that can seem intimidating. Working closely with many French property developers who choose them for the clarity and simplicity of presentation they provide to their clients. They pride ourselves on professional service and dedication to finding the best offer until the date of signature. They are happy to welcome clients at our offices in London and Paris and can be contacted at their website, website www.athenamortgages.com, or by telephone +44 (0) 207 474515

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• Mortgage applications up 9% during August
• Property sales 15% higher during August
• West of France proves the most popular with British Buyers

Interest in the French property market continued to grow during August, in line with positive macro-economic news.
In mid-August, it emerged that France was the first of the EU nations to come out of recession, showing growth of 0.3% between April and June.

Relative to the UK, the French economy has been much less exposed to the hard-hit financial services sector, while the property market, and household finances generally, are also less geared on debt.
Athena Mortgages saw an 18% rise in mortgage enquiry levels during August (on July) and a 9% rise in mortgage applications.

Its figures were consistent with those of Sextant French Property Agents, the network of French estate agents, where enquiries were up 30% in August relative to July, and sales a significant 15% higher.

During August, property prices across France as a whole fell back slightly (-1.2%) according to data from French estate agency body, FNAIM, although there were naturally regional and area-specific variations, making for interesting negotiating conditions.

Average prices, despite recent rises in some areas, are still significantly discounted relative to 18 months ago, and are one of the key drivers of interest from would be bottom-fishers.

The area of France that is most popular with British buyers at present is the West. In Brittany, enquiry levels from British buyers were up 25% in August, and these buyers are mainly looking for older properties that are in need of redecoration and refurbishment. The average sale price in Brittany is currently €130,000.

Budgets are bigger in the two other most popular areas, Poitou-Charentes (€300,000) and the Dordogne (€200,000), and again the focus is on property in need of refurbishment.

John Luke Busby, director, Athena Mortgages, comments:
“There’s a feeling among prospective buyers of French property that we’re now in the bottom of the trough and that if they don’t make the move soon, they will lose out on some of the most competitive prices to be had in a long, long time. This is reflected in the growing number of estate agent enquiries and mortgage applications. The buzz that once surrounded French property is beginning to come back. People now have the chance to buy in at prices that would have been unthinkable a few years back and lock in to very attractive mortgage rates.”

Matthieu Cany, managing director, Sextant French Property Agents, adds:

“Both enquiry levels and actual sales are really picking up. As in the UK, people are sensing that now is a window to buy French property at exceptionally competitive prices, and more and more people are doing just that. Most of them are targeting properties that need work. They obviously feel that by adding value to a property they will amplify the upside when the market bounces back.”

For more information, contact:

Dominic Hiatt, Rhizome PR — 020 8670 4920 | 07595 221604
Jonathan Stevens, Rhizome PR — 020 8257 5183 | 07977 119579

About Athena Mortgages
Athena Mortgages is a close-knit, multi-lingual team with significant experience in the French property market. We have helped thousands of clients find the best available mortgage for their French property. We work closely with many French property developers, who choose us for the clarity and simplicity of our presentation. We continue to search for the best deal for our clients right up to the day of transfer of the property. We pride ourselves on professional service and dedication to finding the best offer until the date of signature. We are happy to welcome clients at our offices in London and Paris!

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Although there aren’t huge numbers of French properties that are going under the hammer, amongst those that are there are some bargains to be had so if you aer considering buying a property in France, auctions may be well worth looking at.

Property auctions in France are a way to save on agents’ fees as well as an opportunity to look at unusual properties.

If you are planning to buy at auction, whatever country you are planning to buy in, there are some guidelines you should always follow.

• Attend a couple of auctions to familiarise yourself with the process
• Be fluent in the language of the auction, or have someone with you who is fluent
• Do your research – don’t walk in blind. Know the properties you are after, and know how much they are worth. Don’t bid blindly as you may end up paying over the odds.
• Have your finances in order before you start bidding on property.

With French property auctions, there is often a ten-day waiting period after the auction to see if anyone else places a bid 10 percent or more over what you bid. If the property does attract a bid, the lot will go back to auction at the new higher price.

Read why now is a good time to buy property in France.

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After 12 months of decline, France’s economy grew by 0.3 percent between April and June against experts’ belief that the economy will continue to slide.

Germany has matched France’s economy with a 0.3 percent GDP rise over the same period.

The figures will breathe hope into the property markets in both France and Germany, and with this, property prices should stop sliding and may even begin to rise again. Investors are starting to feel more confidence in French property and increased interest in real estate in France may lead to more deals being made. The low Euro interest rate may also help boost property sales in both Germany and France.

With the increased investor confidence, now may be the perfect time to invest in a French property or German property as the respective property markets may be at, or close to, their bottom therefore bargains can be bought. With experts predicting that property prices will start to rise again in the near future, it also means that investors should be able to sell on their properties quickly and realise a good profit in a short period of time.

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The French residential property market is showing encouraging signs of stabilization after the market shock caused by the global financial and economic crisis. On average, prices rose by 3.9% during the second quarter, resulting in a total annual return to July 2009 of -2.5%.

Much of the market’s resilience is due to the prudent lending criteria that have been in effect for many years: in France, lenders do not allow borrowers’ total outgoings on finance payments to exceed one third of their total gross monthly income. This way the bank can be sure that any change in circumstances does not precipitate immediate financial problems and that the borrower will continue to be able to make the monthly repayments.

In effect, the prudent lending has allowed for a continuing availability of mortgage finance in France and this has kept the overall drop in prices modest. While mortgage finance in the UK remains difficult to secure at higher LTVs, the French banks continue to lend to borrowers with smaller deposits, even up to 100% LTV.

The buy to let sector in France is attracting particular interest from investors at present, as price falls have boosted gross yields. The average annual gross yield in France is currently 5.6%*, which compares to 5.1%** in the UK as a whole and 3.79%*** in London.

Popular areas include the medieval town of Troyes in northeastern France, with average gross yields of 6.3%, Perpignan in the South East with a gross yield of 6.2% and Chateauroux, in central France, where gross yields are averaging an exceptional 8.5%.

John Luke Busby, director, Athena Mortgages, comments: “For second home purchases, the French property market is stabilizing and a degree of normality has returned. However, what has changed is that while, in the past, the majority of British buyers opted to finance their French purchase in the UK, very competitive interest rates, the lower sterling/euro exchange rate and the availability of French funds are seeing more people opt for a French mortgage to buy their second home.

“Similarly, many buyers are opting to borrow more in France rather than take out an equity release mortgage in the UK. Overall, with people selling in some of the better areas to take advantage of the stronger euro, the market is quite buoyant. In the second quarter of 2009, we’ve seen a 42% rise in the number of mortgage enquiries compared to the first quarter and a 22% increase on the second quarter of 2008.

“Particularly attractive to UK investors seeking to buy a second home in France at present is a 100% LTV euro loan fixed at 4% (capped at +1/-1) for 25 years. For anyone seeking guaranteed payments and peace of mind for the lifetime of their mortgage, this represents exceptional value.

“Leaseback purchases are also popular with investors looking to lock into low interest rates and improving guaranteed yields. With the VAT rebate on new build leasebacks, investors can often finance 100% of the price of the property with a euro loan, covering only the closing costs — stamp duty, bank fees, mortgage registration costs, for example — from their personal funds. However, these can also be included in the loan on some repayment mortgages.”

Some of the new mortgage options with fixed monthly payments that can only increase by the rate of inflation are also proving attractive to borrowers, with the added benefit of rates starting from less than 3%.

On one product, available at an LTV of 99% on new build leaseback developments and 85% on standard properties, the initial rate is fixed at 2.85% for three months. After this it reverts to Euribor + 2.45% for the remainder of the term (with a current pay rate of 3.45%).

Crucially, though, if Euribor rises, payments are capped at the rate of French inflation and the difference is added to the loan amount, the term of the mortgage being extended by up to five years rather than repayments increased.

The mortgage has a maximum term of 30 years and there are no early repayment charges. There is a 24-month deferment period on repayments and it is also available for refinance and equity release purposes.

John Luke Busby concludes: “Taken as a whole, this is easily the most competitive and flexible French mortgage product we have been able to offer. Not only are repayments capped at the level of French inflation, which provides important peace of mind ratewise, but they are further hedged by an automatic mechanism that extends the mortgage term by up to five years.

“Given that most clients tend to sell within the term of the mortgage anyway, the added interest payable over the full term of the mortgage becomes immaterial. Also, in the case of French leasebacks, as the owners usually have an index-linked rental income, any monthly shortfall will stay more or less the same. This product has been launched at a time when the French property market is being stimulated by a range of favourable Sarkozy-led tax incentives and we expect it to be very popular with clients.”

Sources:

* FNAIM
** ARLA
*** Knight Frank Prime London Investment Index — June 2009

About Athena Mortgages
Athena Mortgages is a close-knit, multi-lingual team with significant experience in the French property market. We have helped thousands of clients find the best available mortgage for their French property. We work closely with many French property developers, who choose us for the clarity and simplicity of our presentation. We continue to search for the best deal for our clients right up to the day of transfer of the property. We pride ourselves on professional service and dedication to finding the best offer until the date of signature. We are happy to welcome clients at our offices in London and Paris.

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