French property watch
Athena Mortgages has launched a monthly French Property and Mortgage Watch, which should provide a useful overview of the French property market and an invaluable pool of information for potential investors looking to invest in property in France...
July's report includes French property price trends, gross yields information, and some of the most popular areas to invest in property.
The report says that the French residential property market is showing encouraging signs of improving, with average prices up 3.9per cent in Q2, following a lull in the market caused by the global financial crisis.
But France's cautious approach to residential mortgage lending, has effectively reduced the impact of the global economic downturn, and seen France's property market fare better then most neighbouring countries such as Spain and the UK. Average residential prices in France have depreciated moderately, falling by just 2.5per cent on an annual basis.
France's rather sensible lending criteria, which has been in effect for many years, generally only permits anyone taking out a mortgage to borrow up to three times their total gross monthly income, helping to prevent sub-prime mortgage type loans.
While mortgage finance in the UK remains difficult to secure for borrowers with a small deposit, in France it is still possible to get a mortgage of up to 100per cent loan to value (LTV).
The report adds that the buy to let sector in France is attracting particular interest from property investors at the moment, with greater yields on offer in light of recent French property price falls.
The average annual gross yield in France is currently 5.6per cent, according to the Athena Mortgages report.
Popular areas include in which to invest in property includes the medieval town of Troyes in northeastern France, with average gross yields of 6.3per cent, Perpignan in the South East with a gross yield of 6.2per cent and Chateauroux, in central France (8.5per cent yield).
John Luke Busby, director, Athena Mortgages, comments: "For second home purchases, the French property market is stabilising and a degree of normality has returned. However, what has changed is that while, in the past, the majority of British buyers opted to finance their French purchase in the UK, very competitive interest rates, the lower sterling/euro exchange rate and the availability of French funds are seeing more people opt for a French mortgage to buy their second home.
"In the second quarter of 2009, we've seen a 42per cent rise in the number of mortgage enquiries compared to the first quarter and a 22per cent increase on the second quarter of 2008."
Source: www.homesoverseas.co.uk/news