Photo credit: Nemone
As France and England prepare to square off on the football pitch, British property buyers may have the edge over their overseas rivals. Mortgage rates in France are now nearing historic lows, which see French real estate becoming more affordable just as prices are predicted to drop.
Indeed, France's real estate market has been forecast a grim future, with one expert recently claiming values would plummet by up to 40 per cent over the next four years. Speaking to The Telegraph, PrimeView predicted that the previously booming market would see its driving factors disappear, with an ageing population and the capital's expensive prices (the third highest in the world) priming the country for a downfall "of Anglo-Saxon proportions".
France's own goal
The predictions arrive as Francois Hollande plans to introduce taxes for wealthy buyers following his recent election. These new charges are expected to see French investors cross the channel to put money into London's real estate safe haven – a goal for England.
The Bank of France confirmed dipping demand across the country earlier this month, with the number of mortgages issued in France falling by 41 per cent between January and February this year – the lowest level for almost three years.
English fans of French holiday homes may well be supporting this market decline from the sidelines as the French association of estate agents, FNAIM, predicts a drop in prices of 5 per cent this year. While agents label the downturn an "adjustment" rather than a recession-scale "crash", Brits will cheer at the news that some Paris districts have seen home values slide by 4.6 per cent since the end of last year, according to Seloger.com. Outside of the capital, Brittany has also seen prices fall by 4.6 per cent, with Burgundy suffering more severe decreases of 9.7 per cent.
England's advantage is boosted by France's mortgage rate index, the TEC 10, which neared a historic low of 2.48 per cent last week. Combined with the weak euro and falling prices, the low rates make a winning formation for England's team of investors.
French Property Finance managing director John Busby told Property Wire : "The euro has weakened by about 10% making deposits cheaper. French banks are lending at up to 85% LTV allowing buyers to obtain a level of finance greatly reduces any risk of holding euro denominated property and the rates are in an around their historic lows."
Speaking to TheMoveChannel.com, Rhiannon Cook of estate agent Alpine Angels reveals that the softening of the property market is already seeing demand rise:
"The weakening Euro and the low interest rates in France seem to be attracting a new wave of potential buyers in the Chamonix valley this spring. In addition to that a slight softening in the market has meant properties that were once not affordable seem to be coming into many clients' budget."
The odds may not favour them on the football pitch, but in the property arena, the current score is England 1, France 0.
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