December 2012: Currency update

Investors' impatience with the lack of progress on a permanent solution to the Euroland debt crisis (if that's what it still is) has begun to take its toll. From its position at the beginning of October the euro has fallen by more than two US cents. The euro has actually strengthened by a quarter of a cent against the pound over the same period but that bald statistic hides a fall of more than three cents for sterling during the first three weeks of October and a three-cent rally since then. The position of Spain has not really moved on. The general belief that it should apply for a bailout, triggering the European Central Bank support programme...

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Where can investors find the best French mortgage rates?

With a fixed rate of 2.95% over 20 years, the cities of Lille, Marseille and Toulouse remain the cities where you can find the best mortgage rate. The continuing decrease in the available French mortgage rates lead to an increase in property buyers affordability in 6 cities. In November, the best mortgage rates available have broadly stabilized and only declined in 3 cities out of 10. In Toulouse, Marseille and Lille, it is now possible to obtain a French mortgage at 2.95% over 20 years – subject to certain conditions of age, income and contribution. Now Aubagne and Marseille have got historically low rates particularly for borrowers under...

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Invest in a Student Residence through French leaseback

Student residences are becoming increasingly popular with investors attracted by good returns with low risks. This is one of the most profitable real estate deals but investors must pay attention to the reliability of the management company and the location. This market, neglected in the mid-1990s, has rebounded in recent years in the context of a shortage in the housing market. Today, France has approximately 340,000 designated student properties, whereas each academic year sees  more than one million students seeking accommodation in the rental market. Simplicity and efficiency Mainly composed of studios, student residences are...

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Mortgage rates keep on decreasing

Mortgage rates keep on decreasing in France and brokers say that it reminds them the situation of October 2010 where rates hit record lows. Some brokers in France have succeeded in finding the occasional unexpected fixed rate of 2.95% over 20 years for their French clients. Less than 3% for a repayment French mortgage over 20 years is a dream for many applicants. But the dream remains inaccessible to the vast majority of them even in this period particularly favourable. In fact, the lowest rates are only accessible for the best applicants that have a good financial health and are living in France. In fact it is hard to see rates being able...

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Bargains galore in the French high end real estate market?

The high end property market in France is facing a dramatic increase in supply as Francois Hollande Government announces a tax rise in the coming months. "It's nearly a general panic. Some 400 to 500 residences worth more than €1 million have come onto the Paris market”, managers of Daniel Feau, a Parisian estate agency which specialises in luxurious properties said to the French Press Agency. This huge increase in supply is due to the fact that the new Socialist Government plans to raise the tax rate to 75% on income above €1 million per year and to introduce a marginal tax rate of 62.21% on sales of stock, which has led some the...

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Increase in taxes for non-residents

The French National Assembly has just confirmed an increase in the capital gains and rental income taxes. Overseas owners will be required to pay the additional taxes for the current year as the law will be back dated. However, there is some good news as these taxes should not affect the majority of non-resident owners. France has many dual taxation treaties. In the case of the UK, the new rental income taxes are lower than those in the UK. Whilst, the new capital gains tax rates in France tapes to zero after 22 years. The French government expects to receive extra income from the increase in property taxes. Now overseas owners will be subject...

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French government to rescue Credit Immobilier de France

The French government has finally nationalised the Credit Immobilier de France which has been weakened by a liquidity crisis and a failure in the search for a buyer since May.  “To allow the CIF group to respect its overall commitments, the state decided to respond favourably to its request to grant it a guarantee” said Finance Minister Pierre Moscovici on September 1st. The country would provide a 20 billion euro guarantee without spending taxpayer money. However, the bailout is still subject to the approval of the European Commission. Prime Minister Jean-Marc Ayrault has reassured French citizens saying in a radio interview that, “The...

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Francois Hollande and The French property market

Francois Hollande's election is representative of the French people’s will for change as they are tired of a centre-right led government which has always been rigid in its approach to security, immigration and work. Holland is to re-launch a program for growth and stimulate the economy instead of implementing the austerity measures of Sarkozy. The real estate sector accounts for 18% of France’s economy and growth, so it is likely this sector will benefit from some sort of stimulus package. If you combine this with the strength of the loan book of French banks and the low default rate of borrowers, it is unlikely France’s real estate will...

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French Mortgage News & Index updates

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French banks under pressure to lend less to non-residents

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Opening a bank account in France.

Now opening a bank account in France can be done right from your PC. We are only need a few simple documents and you can have your French bank account open in 48hours. Many people find the process of opening a bank account in France quite daunting, especially trying to overcome the language barrier. French Private Finance now offers this service for a small fee which comes with the following benefits. No need to travel to France to open your French bank account o All the process could be done online No need to speak French o English speaking customer service are there to help you o Solve your issue quickly and easily The documents for opening a bank account in France via French Private Finance are as follows: Signed French bank account application (copy first...

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What is the EURIBOR anyway?

The EURIBOR (Euro Interbank Offered Rate) is the main index against which French banks set their variable rate loans. For variable rate loans in the UK we generally use the Bank of England base rate plus a margin (the banks charge for lending the money). Linking rate changes to the main bank index makes it easier to judge when rates change.By comparison, in France, variable rate mortgages are linked to an Euribor. There are Euribor rates ranging from 1 month to 1 year, the one day Euribor being the lowest and the 12 month the highest (1.2%). Most banks use the 3 month Euribor, for variable French mortgages which currently stands at 1.18% as we can see from the French market trends box. To this rate of 1.18%, French banks add their margin. The average margin is currently 2%, which if added...

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