French Property Advice

Check out your French builder (Part 2)

2007-05-15T15:23:00.000Z

Do your homework before hiring a builder in France - or just like in the UK you may repent at leisure.

Your builder has to be registered in France nomatter where he originates from and he should be able to give you details of his registration with the Chambre de Metiers. He should be able to show you his unique SIRET number, which should also be on any stationary.

If you want to check out a French builder’s credentials just go to www.manageo.fr and type in what details you have on him to see if he’s registered. To use the Manageo website's search engine you need to know the following:

Raison sociale = company name
No. Siren = company number
Dirigeant = boss’s name
No. de tel = telephone number

Here you can check that details match; get a full address and telephone number and get confirmation of the work that a builder is registered to undertake.

France registered British builder David Lindsay said “Problems with builders are magnified when you’re away from your property and you face language difficulties and a different set of building regulations.

“You must see their registration details and insist on a detailed written estimate (un devis) which gives the price and payment terms. Never pay anything in cash up front.”

Always ask to see examples of past work and when work is done always get a receipt. Never be tempted by a reduction for paying in cash – you will have no comeback in the event of problems. You could also be storing up problems for the future with tax, VAT and, if you sell what is your secondary residence, capital gains tax declarations.

The French system is designed to protect the client from unscrupulous cowboys masquerading as builders, so take advantage of the fact that France is a civilized country with regulations and make the system work for you.

How do I choose French contractors and keep a tight rein on the build schedule?

2007-05-08T12:31:00.000Z

Whether you're having work done on your own French property or developing property for a living, it pays to choose your contractors wisely and control the build schedule as well as your budget.

To find registered tradesmen who are approved, licensed and insured go to the local Chambre des Metiers (Craftsmens' Guild). When choosing always:

Check their Siret number - this shows they are qualified in the job you want them to do.
Get references - check the quality of their work first-hand by inspecting one of their previous jobs.
Hold money back - never pay the full amount up front for anybody's work until you're absolutely happy with the results.
Make sure you get a written estimate 'un devis' - to accept it , write "Bon pour Accord" and sign and date it - it is then binding on both parties.

To keep within budget you have to keep the build on schedule so someone must be on-site to oversee the work. Work done in the wrong order is a waste of money. Will you project manage the build yourself or would your time be better employed earning money to pay for the work? A project manager typically takes 10% but his presence makes sure that work is done in the right order and with reliable builders. Which is most valuable to you, your time or your money?

First time buyers are turning their sights on France

2007-05-07T19:36:00.000Z

With the UK housing ladder already pulled up out of reach, many first-time buyers are choosing to make their first house purchase abroad.

The trend has been noticed by the overseas mortgage specialist Conti Financial Services, which has found an increasing proportion of their business coming from first-time buyers.

Their 'Quarterly Savings Survey' found that a quarter of the first-time buyers questioned would consider moving abroad, many stating that it would allow them to save for a deposit to buy in Britain. The survey also found that the younger the buyer the more likely they are to consider moving abroad with over a third of 25-34s were willing to relocate.

But just how many would ever wish to return to the UK when they have bought in France and lived there for a number of years? If they continue to invest their money in France their equity will enable them to buy a larger house in a prime location.

I want to redevelop and sell on French property, how do I get my finances right?

2007-04-30T15:41:00.000Z

If you want to be a property developer in France then you must keep a tight rein on your budget and not let emotions get the better of your sums!

When:

a = Purchase Price
b = Renovation Costs
c = Re-Sale Value
d = Profit

Your profit (d) is the resale value (c) minus Purchase Price (a) and Renovation Costs (b). Don't take your eye off this equation.

Let's look at the purchase price because the cheapest buy doesn't necessarily make the biggest profit - if there are hidden structural issues the cost of renovation could be prohibitive making the prospect for a healthy profit remote. One thing is certain, in property developing you make your money when you buy not when you sell!

The ideal property is structurally sound and affordable with little work needed and a high profit margin (achieved either by adding value or by external factors such as major infrastructure or jobs coming to the area). You really have to have your ear to the ground to pick up the early tremors and pick a bargain in an emerging hot spot, for most properties there is a trade off between the 4 cornerstones of the equation.

Get a full structural survey done to be sure your investment is solid as a rock and will not turn into a money-pit. Know what you are prepared to pay for something and go no more - be prepared to walk away. Remember you're in the business of selling on, you are not buying for yourself.

You should have a budget for renovation costs, remember to talk to builders to get estimates for re-wiring, re-plumbing, kitchen and bathroom improvements etc so your budget is realistic. Budget for the following:

Labour and materials
Electrics and plumbing
Kitchen and bathroom
Windows and doors
Furnishing and decorating
Fees and Costs (eg. applying for planning permission, architect's fees etc)
Contingency (when dealing with old properties expect the worst!)

Your total Renovation budget will be well spent providing you bought astutely and your Re-Sale value warrants the investment. Factors affecting the Re-Sale value include whether your property is:

Close to an airport with budget flights
In a lively town or village
In an up and coming town or village
Close to the coast
Close to ski stations

Other factors affecting re-sale value are outside space, barns to convert, protected views or scope for a roof terrace - all enable you to add value to to your investment and increase the all-important bottom line, your profit.

Selling French Property (Part 1)

2007-04-09T15:37:00.000Z

The key to selling your French property is to make sure you bought well in the first place. If you bought the right house in the right location at the right price then the job is half done - if you didn't all is not lost. Here are a few tips:

You will have to launch a full scale assault on the market to blow the competition out of the water. Remember you are in direct competition not only with other resale properties but in many cases massive new developments with huge advertising budgets and big marketing campaigns.

These developers pick potential buyers up at the airport, wine and dine them in a 5* hotel, give a guided tour of the show home with its designer furniture and then take them to the marketing suite to see plans and sign on the dotted line. This is what you are up against so you must do everything at your disposal to give yourself a competitive advantage - remember all you need to find is ONE buyer.

When a property isn't very large you've got to maximise every square metre of floorspace. Don't cover stains with throws over furntiture - it's quite literally a cover up and some buyers will think 'if they're covering up the sofa what else are they covering up?' Every room in your property needs re-working to make it feel like a brand new property. Invest money but make every penny count.

Replace old kitchen units, outdated tiles and worktops with the clean crisp lines of all white units and working top; remove partition walls to open out space and turn poky kitchens into ones which will impress buyers. Brits in particular like lots of space to cook in.

Your bedrooms are tiny? If you've got fitted wardrobes then keep them but strip out any other stand alone cupboards and wardrobes to make the room appear larger. The miracle of de-cluttering will show off the square meterage to the full. Simplicity sells.

In brief make your property a show home too - every detail from the furniture, the artwork, the dressings and the lighting should be carefully chosen to make it look as good as a brand new property. Get rid of the junk and the cheap furniture in favour of a chic sophisticated look and don't forget the finishing touches like a parasol and cushions for your sun-loungers.

Is France a safer investment than Spain or non-EU countries?

2007-04-09T12:54:00.000Z

A staggering 1 in 10 Britons have now bought abroad in search of sun kissed beaches or idyllic villages. But for those who have bought in certain destinations the dream lives have turned into nightmares, dream homes have turned into money-pits and dream investments have turned into scams.

Spain's infamous land-grab problem is not the only risk. The turbo-charged Spanish construction industry is spiralling out of control as wave after wave of new-build developments hit the coastline. This could trigger a property crash leaving thousands of Brits high and dry as a glut of properties will mean more supply than demand. In contrast the French coastline is protected by more planning regulation than you can shake a stick at - which protects both the natural landscape and your investment.

But even in France never buy in areas that are purely fuelled by foreign investment as this source could dry up, there must be local demand as well. Buy in places where there is no potential for more development where demand will always out-strip supply - places like historic town centres. And if you do buy on a new-build development bargain hard and get a knock down price so you can sell cheaply and therefore quickly if you want to move on. Remember you make your money on property when you BUY not when you sell!

In non-EU countries euphemistically termed 'emerging markets' you do not have the same protection against scams and corruption. Get-rich-quick schemes are usually scams so don't enter into deals that sound too good to be true. If you do go ahead don't think bribery and backhanders will get things moving - get everything in writing and keep everything above board.

The French system protects both buyers and sellers, unlike in the UK their estate agency industry is regulated and all French estate agents belong to a professional body (usually FNAIM) which guarantees professional standards and provides insurance cover in the event of any mistakes.

What are the golden rules for buying foreign property?

2007-03-31T22:47:00.000Z

The three golden rules for buying property abroad are:

Take independent legal advice
Get a full structural survey done on the property
Speak the language or find someone who does

If you don't do the necessary checks your bargain can fast become a money pit into which you throw good money after bad. So do not be lured by a cheap price tag.

Do not accept pressure from the seller or the agent to buy without the necessary checks. If they are putting pressure on you then ask yourself why, could it be that they want you to commit yourself before you spot a problem? This is the oldest trick in the book and all you need to say is:

"Look, we're going through a process, we're buying this property but we're doing all our enquiries first, if you push us we will walk away".

If you have a limited grasp of French there IS a language barrier - how are you going to read the paperwork and understand the full implications of the contract? OK so the agent speaks fluent English but he has a vested interest in the sale going through - he is not an independent translator and he has no duty of care towards you.

It is essential to have an expert on hand who is fluent in the language and who is fully versed in the legal system so as to represent your interest - if only someone you can fax the contract through to before you sign it!

Get the right people invoved at the right time and you can avoid potential disasters.

Should I take any precautions when buying 'Off-plan'?

2007-03-25T19:29:00.000Z

Buying 'Off-plan' seems like a 'win-win' situation; the developer gets his money early, you get a discounted price and personal input into the specifications.

But we would advise you to instruct an independent solicitor to act for you - one who is not linked to the estate agent or developer. Whereas an English solicitor will automatically ask certain questions on your behalf, a French notaire is not quite so proactive and you you will have to ask them to ask certain questions.

The 'big three ' questions which must be asked are:

Does the builder have planning permission?
Is the builder contractually obliged to give compensation if he doesn't honour the completion dates for the various 'tranches' of the development. You might want to stipulate a maximum or indeed minimum period of time for moving in - both to avoid costly delays and to avoid having to move in before you are ready.
Is there a bank guarantee in place so that you will get money back if something goes wrong?

Do I need to get a survey done on my French house?

2007-02-19T11:09:00.000Z

It's true that most French buyers do not get a full structural survey of a house carried out before they buy, but we would advise prudence here.

This relaxed approach sits well with the easy-going French quality of life we all aspire too - but rather like marriage, commit yourself in haste, repent at leisure. If you waste your precious life savings on what turns out to be the house from hell, your dream home will become a nightmare.

Most French buyers just ask a local architect or builder to give them their opinion, but the only specialist reports cover lead paint, asbestos and depending on the region, termites. French estate agents don't push you to get a survey done because they don't want a straightforward transaction to be disrupted by a 'nitpicking' surveyor unfamilier with the local forms of construction and the French language.

But a full structural survey will let you know quite literally where you stand and enable you to budget confidently and plan your finances. Moreover, there are now many British surveyors offering their services in France and they are both familiar with local construction techniques and are bilingual. We have a list of these professionals - contact us for details.

Why are so many Brits moving to France?

2007-02-12T11:48:00.000Z

A Bordeaux University study has thrown some light on just why it is that so many Brits are selling up in the UK and making home across the channel.

Montesquieu University's survey of 2,750 Brits who are planning to move to France in the next three years reveals that it is only in France that ex-pats with relatively modest means are able to rediscover the rural idyll that was 1950s Britain.

In an increasingly urban Britain, only the wealthy are able to access the quality of life that comes from rural living - not so in France where many villages are still depopulated from the 20th Century population shifts towards towns and cities. New-comers are positively welcomed as saviours of the community and, if they have children, the village school.

The attraction is not just that property prices are still actually related to salaries and pensions, there is also a nostalgia for old-fashioned British values and way of life. Those looking forward to "La Vie Anglaise" across the water frequently cite tight-knit communities where you can leave your door open and where children can play safely, locally farmed food, low crime levels and the joys of Sunday afternoon cricket on the village green!

How should I market my B&B or gîte so I get a quick ROI? (Part 2)

2007-01-27T21:55:00.000Z

(continued...)

4. Market your business in France with a leaflet which can be displayed at the local office de tourisme - check out the size of their leaflet dispensers before you design it. Print double-sided and put lots of photos on.

5. Make an A4 poster for UK marketing, it can be displayed in post offices, supermarkets and leisure clubs - anywhere where you have family or friends who are rooting for you to succeed. Don't overlook the 'trust factor' involved in local advertising. Choose an eye-catching headline (big enough to be read a couple of metres away) use colour photos, succinct text (perhaps bullet-points) and clear contact details. Have your phone number on tear-off strips along the bottom - and replace the poster when it, or the strips, have been removed.

How should I market my Bed and Breakfast or gîte so I get a quick ROI? (Part 1)

2007-01-27T20:51:00.000Z

Here are five top tips for marketing your Bed and Breakfast or gîte to get a quick return on your investment:

A picture really is worth a thousand words, take photos of your property on a bright, sunny day; compose your shots carefully and clear away clutter from room and garden beforehand. A few designer touches will pay dividends; a big bowl of fruit in the kitchen, flowers in the living room and wood in the fireplace will all handsomely repay the effort. If you offer a Bed and Breakfast don't be coy, you are your biggest asset - have some nice smiley photographs of yourselves to give that personal touch.
Don't price yourself out of the market, study what your competitors are charging and undercut them until you have established yourself and have repeat bookings.
Don't build your own website, put your property on a couple of 'directory' websites which already have thousands of hits per day. Look on Google and choose sites from the first two pages that are user-friendly, informative and will present your property attractively and with lots of photographs. The first photo you upload will normally be the principal photo - so make sure it's your best. Mention any 'added value' you can offer as hosts such as baby-sitting facilities, help with booking restaurants or organising activities.

Continued in next blog.....

Tax Tips for UK residents moving to France

2007-01-18T17:17:00.000Z

Don't be tempted to run for the French hills and leave your tax bills behind you - the long arm of the taxman easily stretches across the channel.

But don't worry - with the 'double imposition' treaty in place between the UK and France, you will only pay your dues once. To tie things up neatly before you leave heed the following advice:

Complete and return an Inland Revenue Form P85 giving your departure date. The Inland Revenue will then settle your tax liability.
While you are still a UK resident think about taking any tax-free cash commutation from your pension - it might not be so easy when you are already in France.
While you will be entitled to receive your UK pension while living in France, it might be a good idea to get a forecast of your future entitlement from the Department of Work and Pensions. You might need to top up your Class 3 Contributions to obtain a full pension. Contact www.thepensionservice.gov.uk

Investing in French Property?

2007-01-18T16:27:00.000Z

If you're considering buying a French property as an investment rather than somewhere to live then the maxim of 'caveat emptor' or 'buyer beware' applies even more than usual.

If you're going to out-perform that disappointing pension fund you were counting on, then remember you make your money when you buy - not when you sell!

The best investment may be in a place where you wouldn't necessarily want to live. Make the decision with your head not your heart or aesthetic judgement.
How seasonal is your rental potential? while ski or coastal resorts' appeal is seasonal, capital cities offer all-year-round potential.
Choose a location with a strong demand and limited supply.
Buy under market value, this enables you to make your money when you sell.
Spot up-and-coming areas! Is a new airport being built?, Are budget airlines opening new routes?, Are lots of jobs being created in the area? Think in advance about your pool of future tenants and their access to your property.
Have an exit strategy. How easy will it be to sell up? If the answer to this is 'not very' then should you really be buying there? or should you really be paying so much?

Let the train take the strain!

2006-12-17T22:06:00.000Z

Too old for a student Inter-Rail card but want to luxuriate in the experience of a lengthy railway trip throughout France?

You are never too old for a France Railpass rover ticket , it is valid on all trains running on the SNCF network - including high-speed TGV trains - and you can travel as much as you wish!

Prices range from £92 for a three-day ticket to £197 for nine days in any month. There is also a saver version, for two to five people travelling together and a Senior version for the over-60s.

For details: 08705 848 848 or see www.raileurope.co.uk

Why should I buy property in France?

2006-12-09T20:30:00.000Z

With different regions offering climates to suit everybody, outstanding natural beauty, world-famous food and wine, lower cost of living and a slower pace of life, France really does have it all.

And you needn't feel guitly about making the move, you can share the health, wealth and lifestyle benefits with your family and friends - France will enrich their lives as well as your own.

An increasing number of families are re-locating completely rather than just buying holiday homes, they frequently cite the excellent health service and education system as reasons.

With regular charter and daily scheduled flights from the UK to so many French destinations, France is becoming more and more accessible every day - an increasing number of people even commute!

If you don't fancy the commute and you don't have transferable skills to slot into the French jobs market, you can even make your new location work for you - as a business.

France is classic holiday country and if you buy or convert property to provide Bed and Breakfast or gîte accommodation in the right location, your new home can even pay for itself - while you get on with the serious business of enjoying your new life in the sun!

French Property is getting cheaper !

2006-12-06T17:00:00.000Z

It's official - it's a buyers' market! The average price of a property in France fell by 0.6% in November say the French estate agents' association FNAIM.

The fall is part of a slowing trend, while average property prices rose by 15% in 2004 they have only risen by 7.3% in the current year to November.

French property is still attractive to investors but a slowing market will keep prices reasonable and ensure that the French property ladder is still within reach of the average Brit!

How can I make money from my French house?

2006-12-05T19:05:00.000Z

Owning a property in France is not just a dream come true - it's also a sound financial investment.

You too can place adverts in your local newsagents, supermarket or local newspaper to rent out your property and actually finance your mortgage payments! Your dream french property can actually pay for itself!

To ensure a maximum return on your investment you must remember the maxim 'location, location, location' and buy accordingly. Buy in haste, repent at leisure.

With up to 32o days of sunshine a year, southern France is the ideal place for year round rentals with holidaymakers, golfers and long-term tenants looking for a little 'dolce vita' in our long winter months.

There are many factors which will determine the amount of rental income your property will generate. Some of these factors include:

Location of the property
Distance from the beach, golf course and airports
Property size and number of bedrooms
Local amenities (promimity to cafés, shops etc)

Making money from your property rather than leaving it standing empty does, however, entail some risks. These risks can be minimised by employing the services of a property management company who will provide reassurance and a number of important services which will add to your tenants' holiday experience, these include:

Maintenance and Repair

Housekeeping

Gardening

Airport Collection for tenants

Frequent site visits to put your mind at rest while you are away

So why not unlock the full potential of your home in the sun?

How Much do I pay the Notaire?

2006-12-04T17:02:00.000Z

When you buy a property in France you need to cover not only the price of the property but also the costs involved in the buying process - estate agent's fees [See How Much do I pay the Estate Agent?]and Notaire's fees.

The conveyancing cost consists of notaire's fees, land registry fees and stamp duty - and all are payable to the notaire.

If you're buying property under construction or less than 5 years old, these charges would normally amount to between 2% and 4% of the purchase price.

If you're buying property over 5 years old these can amount to between 6% and 8% of the purchase price (on a sliding scale with higher priced properties attracting a lower overall percentage).

As well as these conveyancing costs there are costs for registering the bank's charge if you have arranged a loan from a French lender. This varies according to the amount of the loan, €1,659 for a loan of €150,000 for example.

The notaire's fees and the stamp duty are based on fixed national tarifs and charges should not vary between different notaires. However, if you are buying a property direct from the Notaire without passing through an estate agent, the notaire will charge a sales commission fee.

None of these fees can be included in the amount of the loan so you need to have some capital put to one side to cover these costs.

Who is the Notaire?

2006-12-04T16:18:00.000Z

The French Notaire replaces the British solicitor in property transactions - but only one is necessary and he represents neither vendor nor buyer!

The Notaire is an independent public official who has the monopoly on conveyancing (cessation des biens immobiliers) and who collects the taxes due on a property transfer on behalf of the French government.

Unlike in the UK where the vendor and the buyer each have their own solicitor to look after their respective affairs, in France the same notaire usually acts for both parties. It is his duty to ensure that the transaction is valid, that there is legal proof of ownership (the seller's title) and there are no outstanding debts or claims of ownership on the property.

He conducts searches, prepares documents and is responsible for the collection of frais de timbre (stamp duty) and droits d'enregistrement (registration fees).

While most transactions use just the one notaire, you can, if you wish, instruct your own - this will not increase the the total fees, the same sum is then split between the two notaires.

As the buyer it is your duty to pay the frais the notaire (notaire's fees) [see How Much do I pay the Notaire?] and it is always advisable to make the initial deposit and subsequent balance payable to the Notaire not the estate agent.

I’ve found my dream French property, but just how do I buy it?

2006-11-27T19:14:00.000Z

When the estate agent has accepted your offer on behalf of the Vendor you will sign a preliminary contract with the agent. For an existing property this is called a Compromis de Vente, if your property is still under construction (VEFA – Vente en Etat Future d’Achèvement) you will sign a Contrat de Réservation.

This preliminary contract commits both parties to the transaction at the stated price – so there is no gazumping. You also have a seven-day cooling off period after signing during which you can withdraw from the agreement - without giving reason - and incur no penalty. There is no such luxury for the vendor.

You can also insert a number of conditions suspensives into the contract, these are let-out clauses which will ensure your deposit is returned should you not be accorded a mortgage or planning permission to build gîtes for example.

After your seven-day grace period, you pay a deposit, usually 10% of the purchase price for older properties and between 2% and 5% for properties under construction. You should make this cheque payable to the Notaire who will deposit it in an escrow account until he distributes it at completion.

The Notaire (see Who is the Notaire?) then starts his land use, conveyance and lien searches. The vendor is obliged to commission an expert to inspect his property and prepare reports on the presence or otherwise of lead paint, asbestos and, in some regions, termites.

When the Notaire has finished his searches (before the date you have agreed with the vendor for completion) you will be able to make your final payment of the balance due and sign the Acte Authentique de Vente (Deed of Sale) at the Notaire’s office.

You are now the proud owner of your new French home!

Do I have council tax or rates to pay on my French property?

2006-11-27T19:13:00.000Z

Property owners in France have two types of annual tax to pay:

Taxe Foncière: this is a land tax and and is always paid by whoever owns the property on January 1st of any given fiscal year. The figure is based on the rental value of the property and the rate of tax is determined annually by the authority. This tax is actually comprised of the Tax foncière bâtie i.e. on the building and the Tax foncière non- bâtie i.e. on the land. Owners of new properties are exempt for the first two years.

Taxe d’habitation (local rates): this is a dwelling or occupancy tax covering services and maintenance provided by the local council. This is paid by whoever occupies the property on January 1st – whether owner or tenant.

The amount of these taxes does vary according to the commune and the size and quality of the building. The estate agent who holds the instruction to sell the property will know the amounts concerned and is duty bound to inform you.

It is possible to pay Taxe Foncière and Taxe d’habitation in monthy instalments by prélèvement (direct debit) which you can set up from your French bank account. The local tax office (l’Hotel des Impots) will provide you with an application form.

Why not get a job in France ?

2006-11-27T19:12:00.000Z

You don’t have to wait until you win the lottery or retire in order to relocate permanenlty to France – you can pay your way just like any French person does by working in France.

2006 is the European Year of Workers’ Mobility so you needn’t let an accident of birth stop you from choosing where you want to live and work. You don’t need a work permit to work in France.

Jobcentre Plus has 22 full-time European Employment Services (EURES) advisors who can give you advice and guidance on finding work in France – there will be at least one advisor in your region. EURES advisors work with advisors in France, helping employers to recruit people by organising jobs fairs and interviews. They also hold seminars and recruitment days. You can call the International Jobsearch Advice Team on 0113 307 8090

You can also visit www.eures.europa.eu which contains thousands of job vacancies in all countries in the European Economic Area. You can search by typing in the type of job you are looking for or just scroll through all the vacancies and see what is on offer.

You can also put your CV online for employers to consider – you could be the ideal person a French employer is looking for!

Other websites to try include:

www.eurojobs.com

www.yourjobabroad.net

www.careereurope.co.uk

Currency Exchange specialists can save you a fortune!

2006-11-27T18:53:00.000Z

As we jet off for our hard-earned holiday each year we all notice that the same number of pounds seems to get us differing amounts of the same foreign currency from one year to the next.

But while buying our holiday spending money on one day as opposed to another might save us tens of pounds, it can make a difference of thousands of pounds when we are transfering the large sums of money that are involved in purchasing a French property. Consider the following example:

While a property costing 250,000 Euros would have cost you £165,175 if you made the transaction on the 24th of June, the same 250,000 Euros would have cost you £174,775 on the 21st of July – a difference of £9,600.

Using currency exchange specialists allows you to eliminate the risk of fluctuations in the exchange rate. A Forward Contract allows you to lock into a price today for a transaction that will take place in the future – especially useful if you have staged payments to make over a period of time. This allows you to budget ahead and gives you the peace of mind of knowing exactly what you will be paying over the term.