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January 7, 2008

French market set to outperform UK

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by Gill Montia

French market set to outperform UK

The French property market is expected to outperform that of the UK in 2008 and Trisha Mason founder of VEF, the French property agent, is recommending a number of locations, including Languedoc-Roussillon.

Here prices are less than in Provence but the climate and landscape are similar. The area contains plenty of substantial properties in need of renovation that can be purchased for around £100,000.

However, the stresses involved in overseeing such projects has left many UK buyers shying away from large renovation projects in favour new-builds, which also have the advantage of lower costs in terms of legal fees and stamp duty (3% rather than 8%).

Bargains are also still available in the Auvergne, which is famous for its extinct volcanoes.

According to Ms Mason, the region “is just about the cheapest place to buy in France … it has a lot of good-sized stone houses and a double letting season: in summer, and for the skiing in winter”.

The new high-speed rail link from St Pancras is a major encouragement to UK investors. For example, the Pas-de-Calais area is experiencing strong interest from first-time buyers priced out of the UK market, and cross-Channel commuters.

Other areas within easy reach of major rail centres, such as Avignon, Limoges and Poitiers, are likely to see renewed interest from UK investors during the coming year.

UK buyers are still predominantly middle-aged couples seeking a country cottage for holidays and retirement, but purchasers looking primarily to make an investment are increasing in number.

Whatever the reason for buying a property, if a mortgage is involved, it is worth approaching a French lender as interest rates are currently lower than in the UK.

Fixed-rate euro mortgages can be found at around 4.75%, although an arrangement fee is likely to apply.

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