Tuesday, 9 April 2013

It's a fair question, and deserves a quick answer - we don't want anyone missing the boat because of government dithering

BobMex •
I wonder if you can use the new government backed interest free mortgage.
A question posed in response to this article in the Independent ...
An Englishman's home is his chateau
A second home in the country is a luxury the French can no longer afford - cue an invasion of British bargain hunters?
If it is your dream to own a country house in Normandy or a cottage near the sea in Brittany, your moment may have come; the bottom has fallen out of the market for second homes in France, according to a study.
The price of property in some beautiful rural areas – such as Creuse and Périgord in the south west or Morvan in northern Burgundy – has fallen by up to half in the last five years.

My latest blogpost: It's a fair question, and deserves a quick answer - we don't want anyone missing the boat because of government ditheringTweet this! Posted by Bob E at 23:31

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7 comments:

Tim Almond said...

it will be entertaining when the stories come in of people buying in Creuse, only to discover what the weather is like.

10 April 2013 at 02:21
Bayard said...

Why, what is it like?

10 April 2013 at 08:26
Old BE said...

Presumably the prices have fallen because of the French love of property and wealth taxes.

I wouldn't touch French property with yours.

BE

10 April 2013 at 09:11
Anonymous said...

TS, go on, what is it like?

BE, the higher the land taxes, the better value it is, it's that simple. The vendor's loss is the purchaser's gain. All in all, "property owners" do not end up worse off.

10 April 2013 at 10:01
Robin Smith said...

Indeed.

There is a remaining question though that will clear things up:

What are the yields for those sites?

Above or below the long term interest rate (5%)

Real Yield = purchase price plus all expenses / annual rental stream

Nominal Yield(what BTL's use) = current selling price / annual rental stream

If above you want to buy and rent as a 2nd home. If below you want to buy and flip.

Something is about to happen. Dont miss out.

10 April 2013 at 12:38
Old BE said...

MW thank, I know the theory, I've been reading your blog for a while now.

It's interesting to see it in action. My point was that I wouldn't trust the French state not to retrospectively tax me or suddenly hike the rate. In fact, didn't your friend M Hollande recently say that he wanted foreign owners of French property to pay a higher rate than free-born Frenchies?

BE

10 April 2013 at 14:27
Anonymous said...

BE, it is very interesting to see it in action. 75% income tax rate = some people move abroad, revenues fall. Higher property taxes = nothing happens, revenues rise.

If you are thinking of buying in France, then your best bet is to hope that the tax goes up to maximum level fairly quickly, in which case you'll be able to snap them up for a few cents.

As to higher rates for non-residents, I think Hollande will struggle to get that one past the EU (I helped out a Ukipper on exactly that point, we won of course). A tad hypocritical of us, but so what? At least we were using the argument to the detriment of the French :-)

10 April 2013 at 14:32

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