french property packs a powerful post crunch punch
News Posted On: 07 July 2010
Overseas mortgage provider Conti has announced it's lowest ever rate on French mortgages at just 1.95%.
Clare Nessling, Conti's Operations Director, says: "According to our records, this is the lowest rate we've offered for property in France. The country has become an increasingly attractive investment option, not least because of very low interest rates and easy access from the UK, but also due to the falling value of the euro, and lower property prices, with many sellers dropping their prices to levels we've not seen for several years. But the bargains won't last forever, so prospective buyers may want to act sooner rather than later."
Combined with the Euro's current slide against Sterling -- down from the ceiling of 1.10EUR/1.00GBP at the start of the selling season, to the current level of in and around 1.20EUR/1.00GBP -- which has made French property and that of the wider Eurozone around 10% cheaper to British buyers, to make French property currently very appealing to British buyers.
Of course the biggest draw of French property is the stability and proven resilience against international financial fluctuations, and even internal political upsets. Just as the doomsayers were being proven right, when the US crash was infecting the world via the UK at the tail-end of 2008, we said that France stood a good chance of seeing its property market remain stable, mainly because it had remained largely stable during the boom.
According to the Knight Frank global house price index French property prices were just 4.5% lower in the year to end Q1, up 2.5% over the six month period, and up 0.5% over the quarter. While the latter two indicate that growth is slowing, that is not a bad thing given the fact that the stimulus is being withdrawn and economic growth slowing. Looking at the UK housing market now, those watching the falls in the coming months will wish house price growth had kept more in line with that of the economy.
This stability is now proven, and in fact the super-low rate mortgage -- at a time when mortgage lending comes at a premium -- is a massive testament to the stability of French property prices.
With today's cautious-above-all-else buyer, French property does indeed seem to be one of the better bets in Europe, with the leaseback scheme proving to be increasingly popular. The astonishingly low rate mortgage is simply the icing on the cake.
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