Buying property in the south of France:
How to make
sure your holiday romance doesn’t end in tears
The French property
buying trend amongst Brits has taken off to such an
extent that nowadays, no-one seems to think twice about
buying a place in France, be it an investment, holiday
home or permanent residence. Everywhere you look, there
are books, magazines, TV programmes, websites and
exhibitions offering helpful information about French
property purchasing, with only the TV horror stories of
botched sales and catastrophic renovation projects
offering an alternative view. So maybe it’s time to
think about what can happen after the excitement of
owning your first French home has worn off. Three,
four, five years go by; how will you feel? Will you
still be sure you made the right decision? Is your
French home still right for your needs, and with
hindsight, would you have looked before you leaped?
Let’s put the French and Languedoc property market into
context first. It is important to realize that it has
developed dramatically over the last ten years,
particularly as far as British buyers are concerned. As
growing numbers of overseas buyers have stepped onto
the property ladder, so the number of bargain
properties suitable for renovation and farms with
outbuildings ripe for gîte conversion has
dwindled. On the other hand, new build
developments have continued to flourish and buying off
plan has become commonplace for purchasers who like the
comfort and convenience of a truly modern home. In
addition, the growing number of Brits relocating to
France has resulted in the increasing popularity of
large family-sized character homes, while investors
have found that French real estate can give better
returns than stocks and shares or pension funds.
Over the last decade, more and more British buyers have
been snapping up a variety of property types, in line
with the trends outlined above, and in accordance with
their personal circumstances. Downshifting couples and
families looking for a better quality of life have been
purchasing permanent residences, and some have chosen
to buy larger properties that provide them with both a
family home and an income stream, offering B&B
accommodation. Holiday makers have bought older, rural
cottages or newer, coastal apartments, investors have
opted for ski chalets and seaside developments (often
bought via a leaseback scheme), and city centre
apartments, while older folks have been buying villas
of a manageable size and retiring to the sunny south.
However, what some purchasers fail to take into account
is that personal circumstances inevitably change over
time. Childless couples may start a family, and young
families may need to move nearer to secondary schools
or university as children become teenagers. Able-bodied
pensioners will find themselves becoming less active,
or a surviving granny might need to come and live under
the family roof. Money invested in a leaseback scheme
may be needed to fund urgent healthcare or other
unforeseen financial demands; the job that prompted a
move to France may fall through, the business
opportunity that seemed so clear cut may fail to
transpire… the list goes on and on.
So then it’s time to trade up, trade down, or just move
on. Some will want to buy a new French home more suited
to their needs, others may prefer to cut their losses
and return to the UK. But it is not always that simple,
particularly if you’ve bought into a leaseback scheme
and are selling up before the contract (usually 9-11
years) and the 20 year qualifying period for the 19.6%
VAT discount has run its course; or if you’ve
“over-specced” your property it to the point where you
cannot recoup your investment; if you’ve bought a home
that has limited appeal to others due to its location,
layout, size, condition or decoration; or, in the case
of those who want to go back to Blighty, if you’ve
bought a French home which has failed to increase in
value at the same rate as property in the UK.
Obviously, it pays to take a long-term view before
committing yourself to a property purchase. Ask
yourself if what suits you so well today will still be
the right choice five years hence? Will it be possible
to adapt, extend or convert your home to meet your
changing needs? And if not, how easy will it be to
trade places? Current needs and wishes have to be
balanced against likely future developments. It can be
wise to plan your exit route, or at least have an idea
of what your next move might be. Here are some hints
for planning ahead.
The present… and later
Consider your current life stage and what is likely to
happen five years hence. Your housing needs may well
change in the event of:
-
Marriage
-
Separation
-
Starting a family
-
Children attending or changing school
-
An elderly relative coming to live with you
-
Redundancy
-
A change of job
-
Retirement
-
Chronic illness or death
Trading places
How to make your
French home easier to sell
-
Avoid buying in a poor location – it’s the one thing that cannot be changed
-
Consider the size and layout; if there are drawbacks, can they be remedied?
-
Properties in habitable condition offer obvious advantages; deal with the essentials to secure a quicker sale
-
Avoid over-speccing; those gold bath taps may not be to everyone’s taste, and you are unlikely to recoup the cost of your investment
-
Steer clear of unusual colour schemes and flamboyant décor
-
Modernising an ancient bathroom is a must
-
Freshen up a dingy kitchen to add instant appeal
-
Do some DIY - deal with any obvious defects that would put off purchasers
Time to move
on
Selling up in
France? Here’s what you need to know…
-
Avoid selling in the early years after purchase, when you will probably make a loss; allow at least five years to recoup your buying costs
-
Is the local property market in a slump? Unless you are obliged to sell, it can be wiser to rent out your home long-term and wait for the market to pick up.
-
If you need to sell your French property before buying a new home, this should be included as a conditional clause in the purchase contract.
-
However, beware of signing a similar agreement when selling your property, particularly if the would-be purchaser is selling a property in the UK.
-
Mind the gap. If you plan to return to the UK, you may come unstuck if your French purchase has failed to increase in value at the same rate as property back home.
This excellent article appeared on the pages of creme-de-languedoc.com
