Why buy French property now?

Ok, I know it seems like we might be a bit biased given that we spend our time arranging finance for second homes and investment properties in France but I genuinely think it is a great time to be buying property in France.

Let's look at what's going on. ...

Interest rates at historic lows, so it won't be getting any cheaper to finance

Discounts available on properties in some areas, good time to buy to maximise returns

100% French loans available, no need to worry about strength of Euro for currency exchange.

During a long chat with a journalist today, I convinced myself now really is a great time, perhaps another golden time for getting finance in France and snapping up undervalued French assets. One of the main reasons people are put off from going for a property in France is that the Euro is strong. For example a 30% (€60k) deposit on a €200k property costs £54k@ the current exchange of 1.11 euros to the pound. Now the same €60k used to cost £46k when the exchange rate was 1.30 a difference of £12k. Which might be enough to make you think twice but using a high level of finance can reduce the impact of the current exchange rate.

Let's look at the figures on the back of an envelope:

Purchase price €200k

Purchase costs €15k (£13.5K@1.11 or £11.5k@1.30)

Rental income €8k

Cost of €200k mortgage @ 4% over 25 years €12.5k

Balance to pay for the year mortgage cost less rental income €4.5k (£4k@1.11 or £3.5k@1.30)

So the difference over the year between the exchange rate now and a usual level is just £500, which does not seem like something to stand in the way of taking advantage of the bargains on offer. Of course the strategy would be to use the deposit later to pay off a chunk of the capital on the mortgage and to reduce the monthly payments when the exchange rate improves and the pound gets stronger again.

So with all of the above it just seems like there are few reasons to delay you purchase in France, which you do seem interested in having finished this post. So why not give us a call on +44207 471 4515 and we can get started.

Athena Mortgages ©

Posted in: 100% French Mortgages