Sunny French dream hasn't soured for Brits

Prices in France are still affordable for those who want a place in the sun. Julian Knight reports

As Britain freezes, the thoughts of many will turn to living in sunnier climes. No snowbound motorways or rail replacement bus services for those taking the route south out of Britain. And you don't have to go too far south to feel a real uplift in temperatures most of the year round.

Take our closest neighbour France, for instance: not only does it have a warmer climate but it also has the draw of the Gallic culture, fine foods and the best wines in the world. The chic of the Côte d'Azur is there for the sampling, and if you like your mountains and winter sports, the Alps offer these in abundance. No wonder thousands of British Francophiles make the move out there each year – either to buy a holiday home or to settle permanently.

French property has managed to retain its allure despite the global downturn, which started in 2008. Tim Swannie, from Home Hunts, who helps British buyers to find their dream property in the South of France, says: "We didn't have the same lending boom in France and this has insulated the market a little. But, like anywhere, there has been a coming off of prices, say 10 to 15 per cent, but not to anywhere near the same extent as other major global markets."

In the key markets – for British buyers – of the Côte d'Azur and Provence, sales and prices have swung around over the past 12 months. "British buyers have definitely come back. There is a sweet spot with the euro-to-pound exchange of about ¤1.20, and as we have neared that it has encouraged some to take the plunge. But it's not just the Brits buying: there are the Russians, Dutch and even, increasingly, the Chinese," Mr Swannie adds.

Maria McLean, director of Ellisium Partners (ellisiumpartners.com), which, alongside Home Hunts, offers a bespoke service to buyers and renters of French property, says business is good. "There has been a flight to quality when it comes to overseas purchase. People still have the ambitions to own abroad but they want the Is dotted and Ts crossed, and that's where we come in."

Likewise, Nick Leach, UK director of the huge French property and tourism group Pierre & Vacances (pv-holidays.com), says the problems encountered by buyers elsewhere – in Spain and the United States, for example, and in "frontier markets" such as North Cyprus and Bulgaria, has focused minds on the appeal of France. "Buyers are doing a lot more research than they were during the boom years, which is a good thing for France. It's on the doorstep, a long-established favourite with a sophisticated legal and planning system, and rental guarantees are often supported by big groups – such as ours – making it a sensible choice for Britons," Mr Leach says.

Pierre & Vacances has seen British buyers focusing again on the Alps – in particular, the group's new developments in the resorts of Avoriaz and Flaine. But closer-to-home locations such as Normandy have seen an uplift in interest from Brits.

So, with the market ticking along and prices beginning to rise in some locations, where are the French bargains to be had? The Languedoc-Roussillon region is nestled between Provence and the Pyrenees, and is attracting interest from British buyers wanting the French lifestyle but not at premium prices. "This is the authentic south of France: you have the wine, the heritage, close proximity to skiing in the Pyrenees, and the beaches of the Mediterranean," says Daniel Martin, senior real-estate adviser at Garrigae (Garrigae.com) which is opening two new developments there.

The first development at Château de la Redorte offers 14 apartments and 21 three- and four-bedroom villas from ¤200,000 upwards. Property is bought through leaseback, which means that, for the first nine years, the owner has the right of residence anywhere from four weeks to half a year, but the level of guaranteed rental return they get will depend on the usage option selected.

"If you want an annual return of 3.1 per cent, then you have to agree to just four weeks' usage. If you want to stay in the property for 10 weeks, then returns will be lower at 2.1 per cent." Owners and guests at the château have access to a large communal pool, site restaurant, bar and spa. Similarly, buyers at the second development at La Distillerie des Templiers have access to a spa, pool, restaurant and bar, as well as a gym and stunning gardens. Prices start at ¤150,000 for studios and go to ¤450,000 for two-bed luxury apartments. Again, it's a leaseback arrangement, but after the nine-year initial term there is the option to continue to rent out or take up full-time residence. "Many Brits buying in their forties or fifties choose to rent the property out, covering their maintenance costs but with one eye on moving over later. The key is that buyers own the freehold," Mr Martin adds.

As for finance, French banks have a reputation for caution, but if you meet the criteria they are happy to lend. The good news is that rates are at the lowest they have been in living memory. "Basically you can have a 25-year, fixed-rate deal at virtually the same rate as a five-year deal would be available in the UK," says John Busby, from French home-loan experts Athenamortgages.com. As for lending criteria, Mr Busby says these are based on affordability rather than multiples of income: "They look at all your borrowings, and if these take up less than 33 per cent of your gross monthly earnings then they lend. As for rental income, they will take 80 per cent of this into account when making a lending decision," he adds.

One note of caution: the turbulence in the currency markets means buyers can find that between agreeing to buy a property and paying for it the exchange rate can move against them. Christina Weisz, director of currency exchange company Currency Solutions, recommends taking out a future or forward currency contract to protect yourself against an appreciating euro while still being free to take advantage if the euro should weaken further, as looks more likely.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

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