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The cost of buying in France falls by 25pc – and could fall further

French property is attracting huge interest from British buyers thanks to falling house prices, cheap long-term mortgages and favourable currency exchange rates.

These factors mean it is now almost 25pc cheaper to buy a property in France than a year ago, according to international property experts.

The national association of French estate agents, FNAIM, said average house prices had been falling by 1pc-2pc annually over the past few years and could drop by a further 3pc this year. An oversupply of property in some areas means prices are staying low, meaning there are good deals to be found.

Some commentators say that action by Europe’s central bank, which has embarked on a programme of money-printing, or “QE”, will push house prices up over the medium term, making now a good time to invest in property.

John Busby, director of French Private Finance, said he expected prices to rise by 15pc-20pc over the next decade.

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Ultra-low mortgage rates are also attracting foreign buyers. Very long-term fixed deals are the norm in France and it is now possible to get a 20-year fix for 2.55pc, with even lower rates available for the very best borrowers. This is a sharp fall from 3.5pc a year ago. To qualify for these rates buyers need at least a 15pc deposit.

Mr Busby calculated that someone buying today would save more than £45,000 in interest payments over the 20-year term of a €400,000 (£290,000) mortgage if they fixed at 2.55pc compared with 3.5pc.

At the same time, the pound has soared against the euro over the past 12 months. Figures from Prime Foreign Exchange show that the pound was worth €1.38 at close of play on April 1, up from €1.22 a year earlier.

This effectively means that the price of a €150,000 house in France has fallen from £123,300 to £109,000.


The Telegraph, Nicole Blackmore

 

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