Sep 09, 2010
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Oct 11, 2006: Cote d’Azur loses none ?f its allure b? Cheryl Taylor
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Oct 11, 2006:
France can’t compete with emerging markets but new-builds and apartments ?r? retirement and holiday home hotspots
FRANCE is ? hugely popular overseas investment destination despite th? distraction ?f emerging markets such ?s Bulgaria and Croatia, according t? th? property investment company Assetz, which has experienced ? 100% increase in French sales since January 2006. th? majority ?f investors want t? make personal use ?f their property ?s ? holiday home ?r somewhere t? retire. Stuart Law, managing director ?f Assetz, says: “Hard-nosed investors might want th? higher returns ?f Bulgaria, but they would not retire there. Quality destinations th?t offer ?n established infrastructure, culture and lifestyle, including excellent food and wine, continue t? hold firm against their new competitors.”
France also retains its lead ?s ? favourite f?r British investors due t? th? ever-popular French leaseback scheme, which offers investment in holiday rental properties and also corporate lets in cities such ?s Paris and Strasbourg.
Fewer holiday homebuyers ?r? chasing th? idyllic notion ?f ? rambling farmhouse in th? Dordogne and instead ?r? opting f?r new-build houses and apartments they can “lock up and lease”. Other benefits include lower legal costs and better letting potential, although French value-added tax payable ?n new property is built into th? purchase price. Coastal apartments in th? warm, fashionable south ?f France ?r? particularly popular.
Law continues: “Relocating t? France has never been easier with broadband connections and cheap flights making it ?s commutable ?s Cornwall ?r Wales. Property prices, though rising, still remain considerably lower than in th? UK, so those retiring in France b? releasing equity ?n their UK home can usually enjoy ? great lifestyle.”
Capital gains in France stood ?t 10.3% over th? past 12 months, according t? th? Assetz Property Investment Tracker. Typical deposits remain low, which along with capital growth and 7% gross yields, results in ?n average 68% return ?n cash invested, it says. ? recent poll commissioned b? th? Property Investor Show reveals 80% ?f people questioned would consider leaving th? UK t? attain ? better quality ?f life. Cheaper flights, faster rail links and better communications ?r? now allowing Brits t? make th? regular commute t? th? UK fr?m overseas, particularly fr?m France.
Commute b? rail, ferry ? recent report fr?m th? Future Forum, set up b? Thomson Holidays, predicts there will b? 1.5m people working in th? UK, but living overseas, b? 2020.
Properties in Barcelona, Marrakech and Dubrovnik will b? popular with culture-loving commuters, whereas professional types may opt f?r cities with vibrant business districts such ?s Hanover, Stuttgart and Verona. Other top commuter destinations will include Faro, Valencia and Alicante.
Gillian Vincent commutes between her home in St Omer near Calais, France, and her work ?t th? Port ?f Dover f?r three days ? week. Vincent says: “My life is so much more relaxing now I have moved t? France. My commute ?n th? ferry fr?m Calais t? Dover is far better than th? stressful commute th?t some ?f my friends make fr?m th? South-east ?f England t? London.
“I have always wanted t? move abroad and here in St Omer I am ideally situated. I have been able t? buy ? pretty three-bedroom farmhouse outright, so I don’t have ? mortgage t? worry ?b?ut and th? lifestyle is superb.”
Trisha Mason, founder and managing director ?f VEF French Property, says: “In th? last couple ?f years we have seen ? growth in th? number ?f people wanting t? buy properties in northern France because ?f th? easy commuting distance t? th? UK.
“Prices ?r? more affordable than in th? UK and offer considerably higher returns ?n investment, with capital growth ?f ?b?ut 14% over th? past three years. One ?f th? main attractions f?r Brits is th? relaxed lifestyle in picturesque locations removed fr?m th? pressured working environment.”
Mason commutes every week fr?m her home near Avignon – ?n old farmhouse, complete with converted outbuildings and vineyards, which she bought f?r E800,000 two years ago and has since renovated – t? her office in London Docklands, wh?r? she owns ? small flat. She leaves work ?n Friday morning and takes th? Ryanair flight fr?m Stansted t? Nimes (l.5 hours), returning t? London ?n either Sunday evening, ?r Monday afternoon. th? average cost ?f th? round trip is ?75, and th? journey takes ?b?ut five hours, door t? door.
Buying ? home in northern France and commuting b? train t? th? City could become ?n option, if th? cost ?f cross-Channel commuting becomes affordable. th? journey t? France will certainly become faster, ?s Britain’s answer t? Japan’s bullet train will slash journey times fr?m London St Pancras t? Ashford International b? 40 minutes in 2009.
Commuters fr?m France wh? work in England might end up paying more tax, however. There is ? double tax treaty which means they would not pay th? same tax twice but they would have t? pay th? higher ?f th? two taxes. ? man living five days ? week in Kent and working in London, going home t? see th? family in Calais ?t weekends, is likely t? b? treated ?s French resident f?r tax purposes, because th?t is wh?r? his family home is situated. However, if th? man worked, but his wife did not, and they had several young children, he could pay less tax in France.
Foreign exchange risk
Lower interest rates make it attractive t? borrow in euros, but if your income is in sterling you will b? ?t th? mercy ?f foreign exchange markets. If th? value ?f sterling falls relative t? th?t currency, th? cost ?f th? loan will b? increased. If you intend t? let your French home, your income may b? in euros, which could make you ? suitable candidate f?r ? euro loan.
www.thebusinessonline.com
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