France’s property ‘renaissance’

A number of the traditional French markets are experiencing imassively increased interest…

VEF Founder and managing director Trisha Mason commented: "With direct enquiries in the office we are finding that there is a return to traditionally favoured areas - south-west France, the Cote d'Azure, et cetera," adding that she believed this was a direct consequence of buyers not wanting to "take too many risks" in the new markets.

Nor were these Southern areas the only popular locations with British buyers, she stated, noting that there was "enormous" interest in the north, although it was "not clear" if this was down to people wanting to avoid air travel to reach their properties.

Overall, she added, the prospects for France were looking good, with house prices likely to grow in value this year. "The laws of supply and demand mean that well located properties of this kind increased in value by around 20 per cent last year and are likely to show a similar increase in 2008," she stated.

Best time to invest

Now, therefore, is the best time there has ever been to invest in France, Ms Mason advised, stating that exchange rates are much more favourable at present than they are likely to be later in the year. This factor, which has seen sterling at its lowest ever levels against the euro, would appear at present to be only heading in one direction.

 Despite the news today that the bank of England's monetary policy committee voted eight to one not to cut rates last month, the chief economist of Investec Securities Philip Shaw stated that he was still expecting an interest rate cut next month. Bank of England governor Mervyn King has hinted at this as well, with comments in a speech in Bristol last night that the current base rate was "probably bearing down on demand".

Value of the pound will ‘decrease’

In contrast with this, the president of the European Central Bank (ECB), Jean-Claude Trichet, told the European Parliament today: "In all circumstances, but even more particularly in demanding times of significant market correction and turbulences, it is the responsibility of the central bank to solidly anchor inflation expectations." This follows previous hints that the ECB may raise rates.

If, therefore, the likelihood is that the Bank of England will cut rates and the ECB will hold or raise them, the value of the pound will indeed be set to decline further against the euro. If so, then maybe now is indeed the time to invest in property across the channel.