Assetz® News - French Property Becomes Even More Accessible to British Investors with New Flexible Finance

French Property Becomes Even More Accessible to British Investors with New Flexible Finance

2nd May 2006 |

It is now even easier for British investors to buy property in France due to a relaxation of lending criteria and the introduction of more flexible finance, enabling France to compete more successfully with other international markets, says Assetz.

Traditionally French banks have been quite conservative in their lending policy, requiring deposits of 15- 20% on average. But in an effort to compete with the UK and Ireland, France is tailoring its finance to suit the international investor.

Mortgages of 100% are now available on selected leaseback* properties, with the investor paying a 5% deposit upon reservation, which is then used to cover all stamp duty/legal costs on completion, with any leftover money being refunded to the investor. Three-year fixed rate repayment mortgages are available at just 3.45% and it is possible for investors to use the property as a holiday home for two weeks every year. With the 100% mortgage, investors will experience a small monthly shortfall, whereby the rental income covers most but not all the monthly mortgage costs. Although this can be avoided by paying traditional deposit levels of around 20%.

Martin Sadler, Sales Manager of Assetz France comments:
“Highly geared French properties are appealing to professional investors looking to expand their portfolio with a hassle-free leaseback investment, which will cost them a minimal initial cash outlay.

“Property prices have been rising at a steady 10.3% over the last ten months, and the rental market in France continues to look strong, driven by high demand and minimal new development.”

Some lenders have also relaxed their debt ratio from the traditional 33% to 40%. French banks use a debt ratio to assess the suitability of a non-resident property investor. The individual’s outgoings, including current mortgages and loans and the intended French mortgage must not make up more than one third, or now 40% of his or her income after tax, in order for them to be considered suitable for a French mortgage.

The buying process in France is generally becoming more straightforward for British and other foreign investors, with mortgage and legal paperwork commonly available in English.

Case Study: Saint Gervais, Chamonix
100% mortgages are available through Assetz on a new 4* leaseback development of 50 ski apartments, situated in the charming mountain village of Saint Gervais in the heart of the Chamonix valley. The apartments range from studios to larger 3-bedroom apartments spread over five chalets, benefiting from the usual 4* on-site facilities including a swimming pool.
Saint Gervais is within an hours drive from Geneva airport, just 25km from Chamonix and 11km from Megeve. Net guaranteed rental incomes of 4.2% are available through a leaseback agreement, with various personal usage options.
Two-bedroom apartments range in price from €238,450 to €250,484.