Low mortgage rates helps France top latest overseas chart

France has overtaken Spain to take the top spot on the latest overseas mortgage chart, with some 53% of loan enquiries in the first quarter of 2016, new research shows.

Ideal buying conditions are drawing British buyers in particular back to the French property market, according to the report from overseas mortgage specialist Conti.

It points out that French mortgage rates are at their lowest in decades and the country’s previously sluggish housing market is turning a corner at last, with reports of price increases and accelerating sales.

Prices generally remain well under UK averages, however, and with the pound regaining strength against the euro in recent weeks, it’s more affordable than ever, according to the firm.

‘Current market conditions in France are great for prospective buyers, with some excellent deals to be made. And there’s plenty of room for price negotiation with some very motivated vendors. The country is also very accessible, by air, train and car, and the culture is familiar, which British investors like,’ said Clare Nessling, director at Conti.

‘Buyers who have been deferring their plans as they waited for the market to improve are taking full advantage and making their move before they miss out on the best deals,’ she added.

In second place Spain accounted to 38% enquiries in the first quarter of 2016. Following a nightmarish few years, the Spanish property market is on the up at last and British investors are regaining confidence and rediscovering their love for this country, the report says.
In third place, but considerably behind the top two was Portugal with a 9% share of mortgage enquiries. According to a recent report from the Royal Institutional of Chartered Surveyors (RICS), Portugal is one of the economies leading the euro area recovery with sales and prices expected to continue rising at a steady pace over the medium term.
Conti is now offering its lowest ever fixed rate for property purchases in France at 1.8% over 10 years for loans of up to 80% loan to value. Mortgage rates are generally still at historic lows, and the best rates are not limited to those with the biggest deposits. Many of the current deals on offer are available for mortgages of up to 80% or 85% loan to value.

Indeed, according to the latest report from French Private Finance mortgage interest rates in France have now reached unprecedented levels, so much so that non-residents with good profiles can now access 20 year fixed rate mortgages from as little as 2.25%.

In terms of savings, compared to May 2014 when French 20 year fixed rate repayment mortgages were at 3.7%, rates have now decreased by 36%. In money terms, the total interest payable on a loan of €300,000 over 20 years has dropped from €117,571 to €72,822 a saving of €44,749, or €3,729 a year.

The report adds that those with very good profiles who are buying in popular areas may also have the ability to access even better rates. In locations such as Paris or big resorts in the Alps it is even possible to access 20 year fixed repayment rates below 2% providing you can wait as the process can be slow.

‘In spite of uncertainty of Brexit many people are continuing to buy when the right property comes to market particularly at the high end,’ the report says.