Hi,

I imagine that you are as pleased as I am that April is here, that spring is well and truly upon us and that the days are stretching out agreeably. Generally, post Easter is the traditional time for the property market to awaken from its slumbers and get moving again. Despite the current financial climate here in the UK, please rest assured that there are still bargains to be had in France and all is not gloom and doom.

Have I cheered you up yet? No? Well, read on…I have a strong feeling that by the time you reach the end of this month’s newsletter you will be able to see that, contrary to the plethora of negative tales in the property markets, now is a good time to buy in France. Prices are set to rise in France this year and it makes no sense to wait. If you want a property in France, go for it now, plan your strategy (I can help you with this…) and you will not regret your decision.

In this issue, as well as my feature on buying now (and paying later!) you will find a lovely property from one of our agents featured (many more where that came from), some sound advice on personal financing, a piece on how to organise your currency from the one and only Charles Purdy and a bit of advice on investing in New Build property in France.

So welcome to springtime and I hope this newsletter finds you as well and as happy as ever.

Please send me your articles/questions/comments. I read them all and will be delighted to help you personally with your France plans. Take a look at our website: http://www.francebuyingguide.com
or simply send me an email or pick up the phone. I look forward to hearing from you!

Kind regards as always,

Alexis
mailto:Alexis@overseasguidescompany.com
France Buying Guide
The Overseas Guides Company ltd
0207 898 0549 (call me!)

Je ne regrette rien!

No one can have failed to notice the credit squeeze, the tightening of belts and the weakness of the pound. But you know, despite all this, now is a very good time to buy in France. Why do I say this? Well, I could wax lyrical about France’s diverse landscapes, community feel, culture and beauty of course but there are also some strong practical reasons why buying now may be a very good idea.

The French property market is a stable one and is expected to fare better than the UK market in the coming year. Then you have low Eurozone interest rates and, of course the, weakening pound. This doesn’t look like changing for the foreseeable future – all of which means that it does not make sense to sit back and “wait and see”.

Price rises in France this year are predicted to be between 6 and 8% and certain popular areas such as the Limousin, the Languedoc and the Lot et Garonne are likely to exceed this. I find that many people naturally gravitate towards the traditional older stone type properties in France, and this type is likely to see the highest growth, although those considering New Builds will find my feature later on in this newsletter very interesting.

It is no secret that the pound is weak – and weakening. This has been the case now for several months. It is true to say that, had you bought a property in France say 6 to 8 months ago, you would have had to pay less for the same property bought now. From the chats I have had with some of my readers, I know this is a source of worry. However, we sometimes lose sight of the fact that, even if the pound was not weak against the euro, buyers would STILL have saved money by buying a while ago. Why? Because French property prices have risen!

My point here is to show you that it is important to look forward, not back, and to see where we might be in 6 months’ time. In other words, with French property prices set to rise and the pound more than likely to continue stagnating, you are faced with what amounts to 2 price rises, so there really is no sense in adopting the “wait and see” approach at all! If you are serious about wanting a home in France, you would be wise to get on with it now rather than later.

Are you feeling a little more optimistic and that all is not lost? Good!

There are other ways in which you can offset the effect of the weak pound and one important step here is to consider ways of financing your property. I would advise looking into obtaining a euro mortgage. First of all, interest rates are lower than in the UK and thus the cost of borrowing is cheaper. Secondly, by taking a euro mortgage, you do not have to pay for the whole of your property immediately in sterling.

You simply have to make sure you have enough euros to pay the deposit and the transaction costs with the remainder being arranged as a monthly payment. You will still have to change your sterling to euros for this, but these payments are smaller and spread out so the effect of your euro mortgage will be that the risk is spread. Your currency strategy is something Smart Currency Exchange can set up for you of course: see Charles Purdy’s article on this later on.

I am often asked also if it is possible to take out a euro mortgage with an option to pay off early without penalty. The answer is yes, this is possible, thereby opening up your choice of options. If the pound stays weak, you have the option to continue with the mortgage but, if it should recover in time, you can pay off your mortgage.

Further on, consider this: you still get far better value for money buying in France than buying in the UK. I have said in previous newsletters that, taken as an average, French property prices come out at a whole 48% less than those in the UK! From my own survey, taken a month or two ago, the Limousin remains the cheapest area in which to buy and is still very popular. For those wanting to buy a little closer to home, Normandy still offers some very good deals.

As with many things in life, whatever you decide to do can be difficult, easy or somewhere in between. But I hope these few pointers have made you see that, if you have been worrying whether it is possible to buy in France in the present economic climate, the answer is a resounding yes! If you would like my personal help in finding your ideal property or need to be pointed in the right direction for a mortgage, please take a look at our resources form by clicking on:

http://www.francebuyingguide.com/resources.htm

I will be delighted to help set you on your way to a home in France and I hope that these thoughts have brought your dream of owning a property there just a little bit closer.

An Option the Banks Won't Tell you About....

by Smart Currency’s Charles Purdy.

It is often thought that the only way to buy currency is by paying for it in full.

Most buyers that don't know about currency options buy the currency as and when it is required - they wait until the last minute. This is what the banks love their clients to do as the client is 'forced' to buy at the rate the bank offers.

Some buyers buy the €’s immediately when they know the amount even if they don't need to use them for 3 months. Buyers do this to avoid the cost of the euros increasing so they know their exact costs.

However there is a more efficient alternative that the banks fail to tell you about.

The alternative is to secure your currency requirements (without paying the full amount for them) using what is known as a forward contract.

Pretend that you require €100,000 in three months time and you don't want to risk the sterling cost increasing by £5-10,000. (An increase can easily happen due to changes in the exchange rate between now and 3 months time)

You can agree an exchange rate for those €’s now. All that would be required is a deposit of up to 10% of the sterling purchase cost.

This means that you don't need to pay the full amount for the Euros now, so you can keep 90% of your funds in a sterling high interest account. By doing this you will know EXACTLY how much you will require when it comes to pay for the €’s in three months time. (You'll know that you won't need to pay an extra £5-10,000 )

It may sound complicated but is very simple to do when you work with a company like Smart Currency Exchange. And the joy of such an approach is that it removes all the uncertainty and the associated stress and strain as you know exactly what your cost will be.

Sterling

The improvement that sterling enjoyed at the end of last week was short lived. It seems to have been a case of buy on rumour and sell on the facts... On Friday it was rumoured that the Royal Bank of Scotland would raise £12bn through a rights issue and that the Bank of England would aid liquidity through the “buying” of £50bn in mortgage loans from the banks. These are now facts, and because of these facts sterling has lost ground. It is thought that the Bank of England will continue to cut UK interest rates and as such sterling is seeing one of its main supports slowly eroded. [All in all, this means that overseas property will become more expensive]

The Euro

The € has had an interesting week and sits at €1.246/£1 inter bank. Euro land inflation is still at the top end of expectations which means that the European Central Bank will not cut the € interest rates in the short to medium term. However, there are ever rising concerns about the Euro land economy as the strength of the € is making Euro land exports ever more expensive. The € still has its “safe haven” status which it has now held for a while but pressure is continuing to rise in Euro land. However don’t expect the € to “blow up” any time soon.

Why overseas property buyers lose money...
...and how you can avoid it!

This 10-page educational report outlines:

• Case Study: When Property Buyer, Mr Reed, Purchased an Overseas Property, he Made Three Mistakes that Cost Him £10,256...learn how you can avoid them...
  
  
• How the Banks make HUGE profits from their long-standing unsuspecting customers
  
  
• Ways to safeguard yourself against adverse fluctuations in exchange rates (or in other words, helping you to keep your money in your pocket)
  
  
• The entire process of moving money from the UK to any overseas location, so that you're armed with all the knowledge you need to make intelligent decisions about your money
  
  
• How you can ultimately save £100’s and £1000’s so that you have ample money to buy furniture and white goods…
  
  
• More case studies of people that lost money due to foreign currency strengthening against the pound, so that you learn from other peoples mistakes rather than your own!
  

And just a couple remarks about the report from our readers...

" We have found your free report to be extremely helpful... Wendy Watson"

"I have read and absorbed the information in the stories outlining the mistakes which the uninitiated can make when transferring currency. It is very illuminating and essential that any one,like myself, who is in the process of buying an overseas property should be aware of. I would go so far as to say that every agent selling overseas properties should be compelled to advise their prospective purchasers that it is paramount that they use a currency expert such as yourselves. Regards, Eric Thomas"

To get a copy of the report at no charge go to: http://www.smartcurrencyexchange.com/freereport.htm

To get a Better-than-Bank rate go to: http://www.smartCurrencyExchange.com/smartsquotation.htm
or call Carl on 08081 630 102 freephone.

This month’s stunning French residence!

How about this stunningly beautiful home? It is situated right next door to a vineyard in a hamlet very close to Riberac, in the Dordogne, with its lovely market. Not only does it have 5 bedrooms, a garden and a swimming pool, but it also comes with a large plot of land (over 8,000 m2!), a little pond and a ready made guest house with its own bathroom. Plus there is a huge attic which could be a playroom, teenagers’ den, games room or study. There is masses of living space and a truly beautiful stone fireplace. The price? You will have change out of £250,000!

If you would like more information about this or any other property, simply fill out our property form with as much detail as you can and send it to me at: http://www.francebuyingguide.com/property.htm
I will be happy to help.

Don’t make a fool out of yourself - do your sums!!

In the early 60’s the race was on globally to introduce colour TV to the world. On April 1 1962, one of the most famous practical jokes convinced the Swedish nation that simply by stretching a pair of stockings over black and white TV screens it was possible to view colour images. Naturally the April Fools hoax featured a huge amount of convincing technical jargon, peppered with gimmicks, including sitting the required distance from the screen with the head moving backwards and forwards rhythmically to achieve the desired coloured effect…! Amazingly, Sweden was duped! A footnote here: Sweden commenced permanent full colour broadcasting to the nation on April 1 1970!

Joking aside, when moving to France it’s important to do your homework and understand all the steps involved to ensure your success. Just because friends do things one way that does not necessarily mean that it’s best for you.

One key element that many buyers fail to consider is the full financial future for yourself and your descendents. The creation of your Will and ongoing Estate Planning is an absolutely essential consideration. If you are keeping any links with the UK, be it property, a bank account or that you continue to hold a British passport, it’s advisable to keep your UK Will active as well as preparing a Will in France.

On the other hand, if you are planning on severing all ties with the UK it is paramount to follow precise steps. One step omitted could cost you an enormous amount in taxes plus potentially disastrous consequences for those that you wish to benefit from your estate.

Incidentally, I can see the “How much will it cost me “ question forming in your mind, as it did in mine! The good news is that the IFA we will recommend you to will charge you nothing (no, you have not read that incorrectly!!) for the benefit of their advice initially. The point at which they start charging is when you take them up on the advice given and retain their services to do so. Their boast is that, at that stage, they hope to make or save you more than they actually charge you, certainly over the medium term. Independent financial advisers must also offer their clients the option to pay for advice by fee rather than commission.

I am enormously excited by this as I really think this could be of tremendous help to you. If you would like me to introduce you to my recommended IFA, please go to:
http://www.FranceBuyingGuide.com/resources.htm

Have you considered perhaps buying a New Build property?

I asked my trusty bilingual solicitor colleague for some thoughts on buying a New Build property in France – an option that I know appeals to many of our readers who are not set on finding that old stone residence. Here is what he had to say:

“Purchasing a new property is a popular way to buy a new place in France. There are several ways of buying a new build house, including buying a plot of land and then entering into a construction contract (generally known as a CCMI contract); or buying a property on leaseback, where the buyer completes a purchase and at the same time agrees to rent the property on a long term lease to a holiday company that would use it for holiday letting, in return for a rental income and perhaps limited rights of occupation.

There are some points that should always be relevant in any new build purchase, and we shall look at some of these points in this article.

New build purchases are often also known as ‘off plan’ purchases, since the sale is often agreed through an agency before a development is anywhere close to being ready for realistic inspection. It is in fact regularly the case that a buyer will be relying on a set of plans and designs contained within an agent’s particulars. Indeed it is frequently the case that the developer may not even have begun construction, for any of several reasons.

Given these points, the first thing to bear in mind when buying a new build property is that the first contract to be signed is generally a reservation contract. That means that what you are doing when signing such a contract is reserving first right to purchase a particular property: the developer cannot sell to any other party before you have first had the chance to complete the purchase.

The developer may be inviting buyers to sign a contract before he has obtained planning permission or even bought the land on which the development is to be built: you will be reserving first right to purchase a property which does not yet exist, and may not ever exist. It may be, for example, that the developer cannot buy the land, cannot get any planning permission, cannot sell enough apartments in advance of the developments starting to justify progressing with the construction. If this proves to be the case, then quite simply the deposit you have paid is refunded and the contract is terminated.

Presuming the construction does progress, you will be invited to sign the transfer deeds well in advance of the point at which you are able to take delivery. Indeed it may be the case that if you are buying an apartment on the upper floors of a building, you are invited to complete even before the structure has reached your floor. Arguably then you can be seen as buying the right to your apartment, once it is completed.

You then take ownership of your apartment as the construction work progresses. Given this it is always sensible to differentiate in your mind completion of the legal documents (when ownership is transferred from developer to you), and completion of the actual construction works (at which point you take the right to occupy or use the property); it is probably prudent to think of this latter stage as the point of ‘delivery’.

On signature of the purchase deed (the acte de vente), at the time of completion, you will often have paid 30% or 35% of the total purchase price. Yet, as we have seen, the construction may be way off even reaching your property. As the work progresses, and various stages are completed, you will be asked to make further stage payments.

How can you be sure that the money you have already sent, and the future amounts, will be protected and even that the property will be finished correctly? The first point to note here is that when you sign the first reservation contract, this must have various documents annexed to it, including various plans of the build and a specification for the works. Furthermore the acte de vente must contain certain guarantees, in the absence of which the notaire cannot complete; this requirement being enshrined in statute to protect the purchaser.

These include a guarantee that the work will be completed in the event of the developer becoming insolvent or otherwise incapable. Should that happen, then a financial guarantor will be called into action to finance the remaining stages. While the guarantees can be complex and take different forms, the fact should remain that even if your seller/developer cannot progress the work, once you have signed the acte de vente you can be certain the property will be finished.

There are various construction guarantees and insurances put in place and there is also a statutory requirement. These guarantees are intended to ensure that your property will be finished correctly, and if there are any structural, mechanical or soundproofing problems then, provided they are revealed within specific time periods (up to ten years for the structure), the guarantees or building insurance can be called into play to correct these problems.

Finally there is also the opportunity to agree a snagging list with the developer. The final stage payment will be made at the moment of delivery, when the keys will be handed to the owner. Up until this point, you will not have had any automatic right to occupy the property, even though you have owned it since you signed the acte de vente: this of course, since it was a building site until that moment.

At the point of delivery, you will be able to inspect the property very closely to ensure that the finish is as expected. Any points not complying will be noted by you and the developer, and you will then allow the developer time to put them right.

Buying a new-build apartment is a popular way of purchasing, yet the paperwork to be completed is quite complex, and the statutory requirements in the field are quite rigorous. The intervention of a specialist firm of solicitors to ensure that all is in place is to be recommended.”

If you need more advice on this, or indeed any other aspect of buying in France, please just email me at: mailto:Alexis@overseasguidescompany.com

Closing

I often talk about the wisdom of making lists. Not only will this stand you in good stead from a planning point of view, lists often make us feel like we are more in control. And when you are considering the huge question of buying a property abroad, this can be no bad thing.

My France Buying Guide consists of 3 documents: the actual Guide, with a wealth of general information on France, how to buy there, an overview of each area and more, a Questions & Answers document and finally a series of worksheets which are proving very popular at the moment for the above reasons. Think about your “must haves” and then perhaps consider your “would likes” as a start. Weigh up the pros and cons of new and old and you are then at least on your way to planning your France dream. http://www.francebuyingguide.com

I am off to my own home in Montjoi in a few days and shall be making the most of the longer evenings to sit on my terrace with my glass of rose, enjoying the peace and quiet after the freneticism of London. I hope to be able to bring you back some lovely tales from rural France for next time.

Meanwhile here is some feedback recently received from one of my satisfied readers, Garry:

“Dear Alexis,

Thank you very much for sending me the abridged version of the France Property Buying Guide which I found readable and pocketable. Both important when I'm busy and seldom in one place. Then you invited me to download the full version of your guide, which I did. I've since printed and bound the guide and dipped into it many time in the last week or so. For me, it compares favourably with the two other French property guides I have been using in the recent past. Your writing style is engaging and invites return.

I have tentative plans to buy into a Leaseback development in the Cerdagne area of the Pyrenees Orientales next year.. So, I'll keep an eye on your currency rates at Smart Currency Exchange.

Regards,
Garry”

As I said at the start, I hope that now you have read this far, you are feeling a little buoyed up about your France plans. I will of course be very pleased to help in any way I can so don’t hesitate to pick up the phone (my contact details are below).

Wishing you the very best of luck with your plans and please keep your questions and stories coming. I am always happy and interested to hear from you!

Kind regards till next time,

Alexis
France Buying Guide
The Overseas Guides Company Ltd
0207 898 0549 (call me!)
mailto:Alexis@overseasguidescompany.com