France – a buyer’s market!

Good news for people who are thinking of buying a property in France – it’s become even more affordable.

There have been several recent reductions in mortgage rates, which now start at just 2.1 per cent for a variable deal, and 3.65 per cent for a 20 year fixed deal. And they’re not just for people with huge deposits either – buyers with deposits of 20 per cent or more can also take advantage of these new deals.

More good news for prospective buyers is that property prices are lower too. According to figures released by FNAIM (French national real estate federation), property sales in France fell by 25 per cent in 2012. For those keen to get a foot on the French property ladder in 2013, reduced prices combined with historically low mortgage rates, could provide a great opportunity. Due to the slower market, there are many motivated vendors who are open to lower offers.

The federation’s data shows that the regions of Brittany and Normandy have been the most affected, and that since March 2012, the number of sales calculated over the last 12 months has fallen by an average of 2 per cent each month compared with the previous 12 months.

Regions such as Rhône-Alpes, however, are bucking the downward trend in sales, with Alpine property proving popular with buyers, resulting in increased demand and sales. In Méribel, for example, the price per square metre has risen by 15.1 per cent over the past year.

Although many expect that the trend seen in the Alps will continue in 2013, the consensus view is that prices will fall elsewhere in France.

The country has become an increasingly attractive choice for second-home buyers, not least because of low interest rates, easy access from the UK and better weather, but also due to some good rental yields, which many investors use to help pay their mortgage.

France represents relative stability amid the global downturn and the eurozone debt crisis, due to its more stable property and mortgage markets. And it still accounts for the biggest number of mortgage enquiries we receive.

Current mortgage rates for property in France available through Conti France

Rate Max loan to value Fixed/Variable Repayment/ Interest only Minimum Loan
2.10% 80% Variable Repayment €100,000
2.30% 80% Variable  Repayment £30,000
3.10% 85% Variable  Repayment €50,000
3.35% 75% Variable  Interest-only €100,000
3.65% 80% Fixed – 20 years  Repayment €30,000

All rates correct as at 13th February 2013. All product specifications will depend on individual circumstances. The table shows a small selection of the deals currently available and should be used as a guide.

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