A view of the French property market

PENNY Zoldan is one of the most recognised names in the world of French property and is a regular contributor to magazine and newspaper articles.

Since starting Latitudes French Property Agents in 1989, Penny has helped thousands of people find a new home in France, and that experience has also been condensed into a book, Buying Property in France (see review).

Here Penny offers her thoughts on what the coming year may hold for people looking to buy in France and why the country has such an appeal to many.

France is incomparable to any other country in terms of diversity of architecture, types of properties and variety of terrain and facilities in the different regions.

Many potential purchasers are Francophiles first and property purchasers as a result. People are buying the lifestyle and ambience, not just a house in the sun or an investment.

It has proved to be a safe bet over many many years, being one of the earliest countries to become popular for holidays and holiday homes as well as permanent moves and has not only retained its popularity but it continues to increase.

People can buy, safe in the knowledge that they will be able to resell their properties when they wish as one of the main differences between France and many of the emerging markets, as well as Spain, is that there is a strong domestic market.

The French themselves buy properties both resale and new and there are not whole estates of UK and overseas purchasers as in Spain and other countries.

One wonders who will buy all the resales of the new developments in these countries in the future and pay the huge capital increases that are promised when the number of properties being built is continually outstripping demand.

At present everyone wants in at the beginning. In France new developments are at least 25 per cent sold before they open the site and are normally sold out prior to completing the foundations, confirming the demand is really there.

Spanish property has been experiencing problems causing a dramatic drop in prices and downturn in demand. It has long been difficult to resell a property in Spain as the continual building of new properties in the areas targeted by UK buyers means that the choice is wide, making it a buyers’ market.

Whereas in France purchasers are attracted to the whole of France, in Spain there appears to be specific areas that the Brits inhabit so that in order to sell they will need to attract another Brit. Although some purchasers buy in the countryside of Spain this is not the norm and the market in Spain is very concentrated in specific areas.

French sales have always been driven by the fact that people love what France has to offer – its lifestyle, ambience, superb food, diversity of activities from skiing to watersports and everything inbetween plus beautiful architecture, pretty villages and a property market where demand has risen consistently and gradually and continues to do so, rather than a market to make a quick buck.

It is also driven by its domestic sales as the French do buy and sell houses, both new and resales and therefore the market is not reliant on overseas investors. The tax laws affecting French resident tax payers make it very beneficial for them to buy residential investment property to let or on the leaseback scheme so that many developments suitable for investment can be sold out in days.

It is an extremely stable market with a legal system which is protective of the purchaser. For instance the seven day cooling off period allows a purchaser to change his mind for no reason during the seven days after signing a contract, giving peace of mind when purchasing.

Estate agents are very strictly regulated so that they have to have a ‘carte professionelle’ to have an estate agency which means they must have 10 years experience and/or a law degree and register with the prefecture etc.

Competition from the new markets has had some effect on the French market but it is gradually receding as people realise the gamble they are taking in some countries where the law is not as protective as in France.

The French market is not based on what the developers are offering as there are just as many resales of character properties – but the new developments are attractive to investors with guaranteed rentals or leasebacks and have shown good increases in value over the last few years as well.

The laws regarding purchase of off plan property make it extremely safe to purchase in this way as the development must have a bank guarantee in place. The banks are therefore guaranteeing that should the builder run into any financial difficulties and be unable to complete the building of your property, their guarantee will come into play i.e. they are guaranteeing that they will make sure that the property is completed.

Many of the major towns have had a lot of investment put into them by the government, including tramways, and new buildings, which brings with it new companies and lots of jobs – which in turn attracts the people and makes the demand – the French market is lead by the French which is a great benefit compared to all these new markets and Spain.

Towns such as Bordeaux, Marseille, Montpellier are benefiting, Languedoc Roussillon generally expects a population increase of 30 per cent over the forthcoming years.

Nice has always been popular and is presently undergoing tramworks and further investment. As well as which roads are continually being improved, the TGV is expanding and the number of flights to large and small towns increases daily, making more and more places accessible and therefore in demand.

In France the demand is for all types of property in all price ranges from isolated country cottages to centre of town apartments, ski properties, sea and golf properties, properties in country villages and properties on secure domaines – that is the attraction of France – not everyone wants the same thing and most people are looking to enjoy the French way of life with the French not in English enclaves.

The strong demand from many other European countries creates a buoyant market for both buyers and sellers, meaning some areas can be quite cosmopolitan.

When buying perhaps on a new development it will not only give you good investment potential, but the probability is that the development will be sold in the main to French people but you may also get a smattering of other Europeans – this can make for a great social life, totally different from the one you have at home.

Because of the fact that you will all be taking occupation at the same time and are likely to be like-minded people having chosen similar properties, it is likely that friendships can be struck up between the owners and their children.

Now should be a good time for Britons to buy their French property with the new president Nicolas Sarkozy planning to strengthen the country’s economy, making the French market even more buoyant in the future.

Predicted tax cuts, combined with a stronger economy will make the nation more willing to invest in property. It may make the French even more property owner-orientated.

For some, the only reason for not becoming resident in France is their complicated tax system and if this was to be simplified as is promised, it would encourage many more people from all over Europe to buy and settle there, increasing the demand for both the sales and rental market.

To sum up, over the last few years Spain has always been the first choice destination for home buyers with France very close on its tail. The emerging markets have taken some of the buyers from both these countries but with the hype now dying down it is only the brave who are venturing into new areas of high risk and promised high profits.

Spain has been hit by a recession which their very false market led by foreign investors has taken very hard, causing a slump in property prices and property purchases.

France has long been the destination of choice for the discerning buyer, looking not only for an ideal property but one that will enable them to enjoy a lifestyle where they can appreciate their surroundings, their families, their food and meals as well as participate in almost every activity or hobby available to man.

The properties have held their own despite some difficult years and have continued to rise in price on a gradual basis so that the property market remains secure.

Penny Zoldan is the owner and director of Latitudes and has gained knowledge and experience of the French property market from assisting clients, as well as having bought and sold properties in France of her own.