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How much for a hundred grand?

3rd October 2008 | back to article listings BACK    print this article PRINT

Those investing in French property may look at many things when making choices about what and where to buy. For some, the primary issue will be getting the preferred location, be this in the bustling heart of a major city, overlooking the Mediterranean on the Cote D'Azur, in the midst of vineyards or on the snowy slopes of the Alps. For others, house type will matter most, be it a rural stone cottage, a mountainside chalet or a Parisian apartment.

While these and other issues will be key factors in the choices made by lifestyle purchasers and buy-to-let investors alike, the issue of price will always appear at some point. After all, everybody has a budget - be it a modest one or a large one - and those buying for investment will be keen on purchasing something with potential to rise in value, whether in the short or long run.

For those looking to buy a property in Brittany, the good news, it appears, is that £100,000 could be ample. French property specialists VEF said many would-be buyers it spoke to at the recent London Property Show were keen on property in southern Brittany and had a budget of around this level.

Noting that this currently equates to around €125,000, the firm stated that this is a realistic price, as there are many properties on its books in the region that currently fit this range. These include a two-bedroom cottage in a hamlet for €107,000, an extendable house in a village for €112,000 and a three-bedroom home for €116,000.

So it appears that those looking to buy in the area have plenty of opportunity to do so, perhaps helping to fulfil the recent prediction by Sextant properties that Brittany would be among the most popular parts of France for British buyers this autumn, where it said many would be attracted by its proximity to the UK, fine food, attractive scenery and old stone houses.

There may also be more good news for buyers' pockets too. The Financial Times has reported today that economists are increasingly expecting the European Central Bank (ECB) to cut interest rates soon. Although the ECB decided to hold the rate at 4.25 per cent yesterday, the paper noted that its president Jean-Claude Trichet has acknowledged a change in economic circumstances and declared that inflationary risks have declined. Thus, says the paper, the likelihood of the first rate reduction in five years coming soon has risen.

If this does happen, this could bring with it a new bonus - that of cheaper mortgages in the eurozone. While anyone buying a French mortgage will have to deal with a system that has always required larger deposits - one reason the country's banks have not been hard hit by the credit crunch - this could still mean a lower borrowing rate. Should this happen, those budgets could be stretched just that bit further.

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