Assetz® News - Fertile ground in France

Fertile ground in France

27th August 2008 |

One of the reasons France may be such a popular property market for Britons, be they looking for a second home, a place to retire to or an investment, is its variety. From the London commuter belt across the channel to the snowy Alps, from the wineries and beaches of the south to the romance and architecture of Paris, there is something to suit all tastes.

When it comes to specifically investing, however, a serious examination may be called for. While those looking for a place to live may put more emphasis on a gut feeling about the aesthetics of a property or the local scenery, the investor needs to think about how their property can bring in a good return.

One expert on the subject is Trish Mason, the Founder and managing director of French property specialists VEF. She said there were a number of particular areas that are currently favoured and some less so, such as the Alpine region of Haute Savoie in the east by the Swiss and Italian borders.

She stated: "The Haute Savoie rivals the south of France in its capital growth and high rental yields but the entry prices are high."

A better move could be the off-plan route, she suggested: "More interestingly for first-time investors are the off-plan leaseback products offering rental returns of around five per cent per annum with the possibility of some personal use as well. It is often possible to enter this market for around €100,000 (£79,900).

But for those looking to purchase existing property, the best move is the big city buy-to-let market, Ms Mason stated. She said that there is an undersupply of "apartments designed to attract young professional couples" as the standard to interior decor is lagging behind. Here lies a big gap in the market.

She concluded: "For any investor looking to upgrade properties I could highly recommend the route of acquiring one bedroom apartments in cities such as Lyon, Toulouse, Bordeaux and Montpellier and upgrading the interior."

Writing recently for French Property News, property consultant Peter-Danton de Rouffignac took a slightly different view, noting that the suburbs of cities tend to have most of the new build rental property. This has an advantage over older buildings of needing less repair and refurbishment in the first place.

However, he noted, grants and "soft" loans are available to landlords to bring older properties up to scratch. Those who can buy in bulk may do well in this sort of venture, he suggested, stating: "It may be advantageous to buy a large, older building containing several apartments and do them up, to obtain the maximum amount of aid."

Mr de Rouffignac's main point, however, is that demand for buy-to-let is high in a country where far more people rent than in Britain, something President Sarkozy's pledge to change may take some time to accomplish. For those buying to let in French cities, plenty of demand is one thing that they can be sure of.