23 October 2018 - French Mortgage News | International Mortgage News | Partners News |
Financing your French property dream with a French mortgage
France is a country that has everything to offer. Throughout the country, visitors are attracted by the beautiful countryside, rich cultural heritage and delicious cuisine. Throughout the summer, countless destinations compete for the attention of tourists, from the glamour of the Cote d’Azur to the cliffs of Normandy, from the stunning scenery of the Ardeche to the tranquillity of the Dordogne.
Yet as we move into autumn, many of you will already be planning your winter breaks. And when it comes to winter holidays in France, there is one destination that stands – literally – head and shoulders above the rest: the Alps.
Buying in the French Alps with a French mortgage to mitigate the exchange rate
We’ve previously talked about how having your own base in the mountains can remove so much of the hassle of travelling (especially for those of you with families in tow) and also how your second home can also pay for itself over the long term. And it seems many of you agree. The Auvergne – Rhone-Alps region is the most popular region for our British buyers so far this year, and we’ve seen an 10% increase on 2017 in the number of purchases there. Its popularity with the British is nothing new – it’s been the most popular region with our buyers for several years.
Property prices within the two most popular departments (Savoie and Haute Savoie) can vary considerably. Our average is €718k – which is a 2-bed flat in Courchevel or an 7 bed chalet in Chatel. Which goes someway to explaining which resorts the Brits are buying in. This year, we’ve seen a huge increase in non-resident Brits buying around the key resorts near Geneva; Chamonix is up 80%, fuelled in part by its investment into non-skiing activities (such as mountain biking and climbing) and becoming a true all-year-round resort.
With French mortgage rates for non-residents at historic lows (1.25% for a 15-year fixed rate), smart buyers are seeing the sense in borrowing the money in Euros to mitigate the exchange rate fluctuations and with no limitation on renting the property out, the ability to attract tourists all-year-round increases the revenue potential. French banks also prefer to lend in property hotspots, where the market is more liquid and will offer higher loan-to-values on homes in those areas – sometimes up to 100% of the purchase price, even for non-residents (although you would be required to place some assets with the bank).
Other areas in and around Morzine, such as St Juan D’Aulps, Chatel, Saomens and Mégeve are also increasing in popularity, and we have seen a fall in demand from those resorts with 3hr airport transfers (like Méribel, Courchevel and Val Thorens in Les Trois Vallees). It makes logical sense to have your alpine retreat within an hour from a main airport hub, to maximise those weekend getaways and when travelling with the kids (although the seasonal weekly direct Eurostar service to Moutiers and Bourg St Maurice does make those resorts more accessible in the winter season). And this convenience will make it more attractive as a holiday let – over 80% of our clients say they will let out their second home periodically to help pay for the upkeep.
Buying in the Dordogne with an AIP for a French mortgage
Encompassing the popular departments of the Dordogne, Lot-et-Garonne and the Gironde, the Nouvelle-Aquitaine region to the west of France remains the 2nd most popular region with our British buyers this year, with purchases in the Dordogne increasing by over 4%. Bergerac and its surrounding villages continue to draw in the foreign buyers due to the low-cost flights and agents in Eymet was saying they had reached 30% of their 2018 target by February! If you are looking to purchase in an area where the properties are selling fast, make sure you speak to us to get an approval in principle. We are the only broker able to get a fully-underwritten AIP, which puts you in the same position as a cash buyer – so you don’t lose out on the property of your dreams
Buying in Occitanie, with a French mortgage to increase your budget
Finally, the 3rd most popular region in 2018 so far is Occitanie, with almost our 15% of British buyers purchasing in the region. When you consider it has over 800 more hours of sunshine a year compared to London, with an average summer temperature of 29C degrees it’s hardly surprising it’s in demand. Most of our clients have bought in the Hérault department which has the Black Mountains, the urban centre of Montpellier and over 80km of pristine coastline. It’s also seen a 4.8% increase in property prices, according to the latest notaires de France report. Our average purchase price is upwards of €350k for this area, 12% higher than reported by the notaires – a fact that is probably explained by the fact that using a French mortgage can increase your budget. With LTVs of upwards of 85% for non-residents and interest-only rates products available your French property dream can become a reality!
Get in before Christmas with a French mortgage
A typical French property purchase can take between 2-3 months to finalise. We are still confident that we can get our clients into their new French home before Christmas – but you will need to act fast. To give yourself the best chance, read the article from last month’s newsletter and give us a call to secure a personalised quote.
Found a property? Request a quote now or call +44 (0)207 484 4600