Wednesday, October 27, 2010

FNAIM say French property market is bouncing back

Sorry, I'm a few days late posting this but I have taken on a couple of new search mandates and have been busy.

I guess that (in a miniscule way) this flurry of activity reflects the October figures from the FNAIM. You can see them in detail here.

According to this august body (it stands for the "national association of French estate agents"), prices in France have stabilised during the third quarter of 2010, with small rises in some areas.

Most importantly though, the number of transactions for 2010 is anticipated to exceed 700,000 with overall price rises of between 2 - 3% predicted by the end of 2010.

As usual I would take the price rise comments with a bucket of salt but the transaction numbers (up from a low of around 570,000 in 2009) are good news.

Of course, for specialists like myself we don't know how many of these buyers are from overseas.... but judging by my ringing phone and pinging emails we may just be seeing the start of a revival here too.

Friday, October 22, 2010

This is why I love the Charente....

We all know that times are tough at the moment, wherever you live. Strikes, petrol shortages, £80 billion cuts in public expenditure, inflation....every time we watch the news on the BBC, CNN or TF1 there's something to be gloomy about.

Yet I drove back from Jarnac this morning with a big grin on my face, counting my blessings.

The sun was shining (again), I passed the school where my youngest is happily ensconced enjoying a terrific education and I was driving through some of the most glorious countryside in Europe. I had been to the bank where I was welcomed with "Hello Mr Downie, how are the girls?" as I walked through the door and has stopped for a sneaky coffee where I was welcomed with "Hello Graham, big game for Bordeaux tomorrow".

What really sums it up though is something we saw on the main 8pm TF1 news last night. My eldest suddenly shouted "That's Luc, he's in my class".

They were running a piece on our neighbouring village Segonzac which is the first in France to be awarded Cittaslow status and had visited her school.

I have blogged about this before but to re-cap, Cittaslow is an international movement of “slow cities”, its symbol being a snail. The movement was first launched in Italy in 1999 and, based on a charter of 70 obligations, pushes cities and municipalities to develop actions revolving around improving quality of life, encouraging local businesses and economies, and respecting the surrounding landscape.

Segonzac is currently undertaking a number of “slow city” worthy actions, such as opening up a new public park, bringing back local businesses, rehabilitating pedestrian and bicycle friendly streets, and creating community gardens.

In our 24/7 world of constant communication I can't tell you how satisfying it is to live somewhere where the art of stopping in the street and just having a good chat with your friends and neighbours is alive and kicking. Where smiles and politeness are real and not manufactured and where community is something found offline rather than just online.

Thursday, October 21, 2010

Looking for a property in Provence?

Just spent a most enjoyable lunch topped off with fresh strawberries from the garden which are still going strong.

It was doubly enjoyable as I was reading this excellent article from one of my colleagues in the FrenchEntrée Property Finders network.

Neil Ranadé hits the nail on the head when he says:

But, in a society that is, by and large, cash rich and time poor, it is interesting to know at what point using a property finder makes economic sense. After all a good property finder should be able to find you exactly the home you want and be able to save you enough money to cover their fees and a celebratory drink in the nearest bar once the deal is done.

Reading the full article it's clear that it's not just in the UK that the buyer is seeking professional representation in this most important of transactions. If you are an international purchaser buying in France then, as Neil says, it's a "no brainer".

So, if you're looking to find something special in Provence and want professional representation I heartily recommend you visit Neil's website here.

Tour de France 2011 - where can you watch it?

Had to share this excellent video showing the route of next years Tour de France.

If you have never seen it live I can't emphasise enough what an amazing spectacle it is for all the family.  If you're thinking of coming to France next year on holiday why not make it some time between the 2nd and 24th July and come join in the fun.

Tuesday, October 19, 2010

Tour de France 2011 - they've nicked our route

Regular readers will know that next year will see me celebrate (if that's the right word) my 50th birthday by tackling a ridiculously difficult cycle ride from Lourdes, over the infamous Col du Tourmalet and back to my home in Cognac.

I'm not alone in this rather bonkers venture and my prospective companions range from a veteran of many Tour de France stages to one of my best friends who doesn't yet own a bike.

So blow me down with a feather when earlier today the organisers of the tour announced the route for 2011.

Stage 12 sees Alberto Contador and friends tackle the Tourmalet and then Stage 13 sees them swoop down from Pau to, you guessed it, Lourdes.

Talk about stealing our thunder.

Seriously though it has made me realise that if I'm to make this epic journey of over 500 km's then I must (for the first time in my life) break out into a sweat and practice for it.

So, dear reader, come rain, hail or snow I'd like your support this coming winter. Even if it's just the odd email or comment asking me how the training is coming along.

The real Tour may well take the limelight and centre stage but the supporting act of Lourdes to Cognac will be a significant milestone for those taking part.


Kirstie Allsopp - my battleplan for buyers

I read this article in the Daily Telegraph from the ubiquitous Kirstie Allsopp and thought she was talking a lot of sense.

It's not rocket science but she tells us how to get the most out of estate agents (as she says, they're not the devil incarnate), how important it is to have your financing in place, how to do your "due diligence" and reminds us of the importance of checking out the neighbours.

I hadn't actually realised that Kirstie too used to be a buying makes me like her a bit more now.

I particularly liked the bit where she says to beware of mod cons:

Remember, what’s state-of-the-art today won’t be in five years’ time. I wouldn’t touch a house that makes a big deal out of having the latest technology.

It's true that many buyers seem impressed by the fixtures and fittings rather than the one thing that truly matters.....the location.

If you're buying in France I'd say that you should also make sure that you have a full understanding of the process that you are about to undertake and, above all, make sure that you have a good knowledge of the local market and have spoken to a cross section of agents.

An efficient notaire will also help smooth the process immeasurably, some of them are still stuck in the dark ages and if you are buying from afar it can prove frustrating.

Monday, October 18, 2010

FT - fall in interest rates draws buyers to France

There's a lovely article in the Financial Times that you can see here. It starts with this statement:

Wealthy borrowers are buying second homes in France after mortgage rates fell to the lowest level since the postwar period last month.

Mortgage brokers have reported an increase in the number of large loan deals being arranged on French property purchases over the past few months, driven largely by the low mortgage rates available. France has traditionally been the most popular location for British buyers of top-end second homes.

It then goes on to say:

The French mortgage market has remained stable during the credit crisis, with banks and lenders showing a strong appetite for lending to foreign investors.

The majority of lenders are happy to lend around 80 per cent loan-to-value – and some offer up to 100 per cent of the value of the property, though buyers must borrow at least €300,000 and have minimum earnings of €90,000.

Buyers can get rates as low as 2.20 per cent, available up to 80 per cent loan-to-value. Borrowers can choose between variable rates, capped variable rates and fixed-rate mortgages – which tend to be the most popular in France.

You can see a "best buy" table of French mortgages by clicking here.

Buying agents currently going the extra mile (or kilometre)...

I had a wry grin when I read this article on The Move Channel.

County Homesearch has a network of buying agents across the UK and they say that with the current market they are having to look a lot harder to find houses that fit their clients brief.

County Homesearch has reported a 100% annual increase in the number of properties visited by its agents before finding the right home for their clients, with some visiting up to three times as many properties now compared to a year ago.

This certainly reflects the changes in my own business over the last 18 months. I have just finished a search that took me from the northern Charente to southerly Charente Maritime.

There's 100 km's between them which I guess highlights one of the major differences between agents in the densely populated UK and those of us in rural France. My clients were very specific on the type of house & gardens that they wanted, as well as the kind of countryside they were looking for. However, when it came to exact location they were less fussed.

If you don't live and work over here you would have no chance of properly scouring the market over this kind of area.

Fortunately I'm aware that my clients have financing in place and are keen to move as soon as I have found the right house for them.

Don't feel too sorry for me though.....I have attached two pics showing the views at a couple of the stunning properties I have been lucky enough to visit.

Monday, October 11, 2010

French interest rates lowest since 1945

I saw an interesting article by Sextant Property over the week-end.

It points out that interest rates in France are the lowest they have been since 1945 with an average of 3.3% last month. They say:

The lowest previously recorded rate was 3.36% dating to the fourth quarter of 2005, the authors of the study remind us. “The financing conditions of the banks are still excellent, and their active commercial strategies are the root cause of this record”, explains Michel Mouillart, economics professor at the University Paris X-Nanterre.

If you read my previous post about comments made by the US investment guru John Paulson it adds credence to the arguments made by the "buy now for long term growth" supporters.

You can see an up to date "best buy" table of mortgages by clicking here.

Tuesday, October 05, 2010

Investment guru Paulson bullish on property

"If you don't own a home, buy one. If you own one home, buy another one, and if you own two homes buy a third and lend your relatives the money to buy a home."

These are the bullish words uttered earlier this week by John Paulson.

"Who is he" I hear you cry...well, he's the highly controversial multi-billionaire investment genius who became famous in the USA for going "short" on subprime mortgages a few years ago.

He told a standing room only crowd in NY's university club that they are on their way to double digit inflation which will kill the bond market and restore strength to equities, gold and property.

You can read more about his speech in this blog on the Forbes website.

With some great long term mortgage deals on offer I have to say that I think his timing may well prove to be impeccable even if his words may seem a tad provocative given the current market situation.

ps: it was thanks to a tweet from a Chicago based realtor @homepartner that I picked up on Mr Paulson's speech.

The 5 best things about living in France

I'm often asked about our life over here and how it differs from our experiences in the UK.

My stock reply is that it isn't necessarily better it's just different and that those differences happen to suit our personal circumstances. Listing five that I like is pretty arbitrary and a straw poll of one person should probably be taken with a pinch of salt.

Of course, this list is also based upon our life in rural Charente and our personal experiences out here since 2003. If you're an expat reading this in central Paris then you may well see things differently!

1. The education system - let's kick off with a controversial one as the French system has taken a bit of a kicking in the press recently. We have found the teachers to be experienced and caring and we like the fact that they are sometimes quite strict. Classrooms are disciplined with polite pupils. They are also well funded and even in our rural village the teachers use "state of the art" kit. We have regular meetings to discuss how the girls are progressing and can check their regular test results (and attendance record) on a secure online site. Oh and the lunches are excellent.

2. The role of the "family" - this plays a huge part in life over here and we love it. Family life is cherished and you can really sense how close knit the community is. Maybe the school hours have something to do with it as we see plenty of grand-parents looking after the youngsters while the parents are still at work and then everyone sitting down to eat together. I can't name a single one of our French friends who allow the kids to eat in front of the TV.

3. The lack of importance given to "stuff" - I know, it sounds weird doesn't it. When we were living & working in London we had a simply huge joint income. We didn't save we just bought "stuff". My friends come to visit from the UK and they come armed with Blackberries, i-pad's, i-pod's, laptops and all kind of apps and gadgets. Sure it means that they are in constant communication and can download the latest episode of X Factor, Big Brother or Strictly Come Dancing but come on.....the endless pursuit of "stuff" hasn't really caught on here yet and I hope it never does.

4. The climate - again, if you're up in Brittany you might beg to differ but it makes a big difference to our life here. On average we get around 2,400 hours of sunshine a year and it helps bring a smile to our face. Put simply I'd rather be on a bike ride with the girls in the sunshine than in the rain.

5. Property prices - they are affordable and relatively stable. Sure you are never going to get the potential for short term gains that you can get in the UK but if you look at what you actually get for your money it's hard to beat. The average price of an "old" house in and around Cognac is currently €136,700 and, in general, I think they are simply amazing value for money compared to other parts of Europe.

So there we go. Of course, it would also be easy to create a list of the worst things about living here (red tape, lots of strikes etc) but for the Downie family they really do pale into insignificance against the positives.

Monday, October 04, 2010

How to value French property...

Last month I was mandated by some international clients to find a chateau & vineyard close to Bordeaux.

The lead originally came from the team at FrenchEntrée and they have some excellent existing relationships with immobilers who specialise in this type of property.

We sourced some spectacular places and so, last Saturday, I met my clients at their hotel and we spent a day viewing a couple of them.

We stopped off at a local restaurant for lunch (it's near Langon and is called Le Nord Sud, I heartily recommend can see their website here) and over a terrific meal we had an interesting discussion about how you value a chateau & vineyard.

Clearly one needs to look at it as an existing business but then you also need to factor in:

  • the value of the chateau itself and any other buildings
  • the value of the vineyard and land (soil type, orientation)
  • the stock of wine currently held in the cellars
  • the machinery that comes with a working vineyard
  • the "x factor" that is given by the history of the property & grounds
Some of these are incredibly specialist areas.

I have a very good friend who is cellar master at Polignac which is one of the leading brands of Cognac. For ten years he was also the cellar master at one of the leading Bordeaux producers in the Medoc. He tells me that while he is perfectly capable of tasting and testing the existing wine stock he would not be able to give an accurate forecast as to its worth - that's a different job entirely.

Similarly, one of the chateau's that we visited is the former home of one of the world's most famous post impressionist painters. What kind of value does this add to the property?

So, at the end of our lunch we decided that any valuation has to include a combination of balance sheet analysis, collective expertise and comparable evidence...but it's also going to include plenty of shoulder shrugging and a dash of "je ne sais quoi".