The South and South-West of France are both areas that are proving increasingly popular with international buyers. Investors from abroad are attracted by the favourable climate, rich cultural heritage of the area, and property prices that have remained more affordable than their equivalents elsewhere, for example in the Cote d’Azur.

Buyers in this area of France will find an environment that optimizes French culture, yet one that also offers some unique, often hidden features that remain largely unknown outside of the country’s borders. There is spectacular mountain scenery nearby in the shape of the Pyrenees, while the cuisine of South-West France is notorious throughout the country.

The property market in this area has been traditionally strong and certain localities have received a real boost thanks to the presence of an increasing amount of foreign investment. For this reason, the range of French mortgages in the South West of France available to international property buyers is equally large and an example of what is on offer can be viewed in our French mortgage latest rates table here. They are particularly content about financing properties in the ever-popular areas surrounding the charming cities of Bordeaux and Toulouse.

The most attractive aspect for buyers is the property prices in question. It is full of bargains, and international buyers will be delighted with the value they are getting.

If you are looking for a real bargain, you must first understand that all French banks impose a minimum loan size for their mortgage credit. This tends to vary somewhere between €100,000 - €150,000. Please ensure that you do your calculations: the maximum loan-to-value ratio to be found among these lenders is 85%, so you have to be careful not to buy a property that is too cheap as to find a mortgage on it.

Another consideration for a good-value property that is often found in more rural areas is to ensure that the property is habitable. In other words, it must benefit from running water, mains electricity and a solid roof and walls, in addition, to a fully-fitted bathroom and kitchen. A property that is deemed to be uninhabitable may be rejected by lenders.

However, there is far more to the South and South-West of France than renovation projects. There are plenty of refurbished homes or fully habitable houses with great potential for sale in thriving areas that are starting to see an increasing amount of tourists. It is for such properties that retail French lenders will always be happy to provide their full range of mortgage products.

By way of caution, you should always do plenty of research into the area that immediately surrounds any potential purchase. There are some wonderful and, at times, quirky properties to be found in the south of France. But it is worthwhile checking that they remain part of a community and are not too isolated from nearby facilities, such as shops or a post office.

The reason for this is that banks in France are always cautious about the prospect of having to repossess properties. This is why they place much importance on what they term the “liquidity” of a property, which means, how easy it will be to sell if it has been repossessed. Sometimes, where overseas buyers see unique real estate at affordable prices, the French lenders see unsellable houses in a stagnant market. Always consult your broker here at International Private Finance for their expert advice, as your property search progresses.

In the whole world of property, there can be few more romantic ideas than the thought of owning your own chateau in France. The South of France is certainly the place to make this dream come true, as international buyers are often surprised to see such properties openly available on the free-hold market at affordable prices. Lenders can offer standard residential mortgages for a chateau purchase, but understand that the underwriters will take the running costs of these properties into account when considering your application for financing. The purchase of a chateau is considered to be a commitment to maintaining the property, and banks will not allow you to be in a position where the cost of the project is too much of a burden for you.

Similarly, some buyers find the temptation of owning their own vineyard too hard to resist. Buyers are always fascinated by the winemaking reputation in the South-West of France, and there are properties that can be sold with vines in their grounds, or even as a fully functioning vineyard. Lenders will look to separate what is residential and what is commercial. They will tend to lend against the value of the residential property located on the land, without taking into account the value of the vines growing there and the income that they may generate.

Important points to consider:

Here are a number of factors to consider if you are thinking of using a French mortgage to purchase a property in the South or South-West of France:

  1. Be cautious about the property that you wish to finance. Quirky rural properties, chateaux and vineyards may all seem like charming options, but your French mortgage opportunities may be restricted by the profile of your purchase.
  2. It is always advisable to engage with a French lender early on in the process, and to secure an agreement in principle. With this pre-approval in place, you will be able to liaise with the bank about properties that you find on your viewing trips, to check that they qualify for financing.
  3. Providing that the property is in good condition, in a good location and demonstrating a strong property market, then financing will be made available to international buyers by most French retail banks.
  4. For the most outstanding properties in the area, it is possible to secure financing with an international private bank. Both the profile of the property and the financial profile of the application will be taken into account, in such cases.
  5. There can be financial planning benefits to having a French mortgage secured against your property. A professional tax consultant will be able to outline the benefits with respect to wealth tax and offsetting rental income against mortgage interest (should you intend to let out your property).

If you are considering buying a property in this region please get in touch with the team today on +44 (0)207 484 4600.

6 Jul 2021

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