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A million British pensioners are receiving their state allowance from overseas, according to new figures from Saga.
France and Spain continue to feature as the destinations where British pensioners would most like to live after their retirement.
A recent Bank of Scotland International (BOSI) survey found that the two countries are the most popular countries in Europe to retire in, among the 31 per cent of pensioners who have considered moving abroad.
But France has become more popular with Brits than Spain because there are fewer established expat communities to annoy them, according to an overseas mortgage adviser.
Matthew Weston, manager of overseas mortgages at Blevins Franks, said that people were looking for a cultural experience and a change of lifestyle rather than a Little Britain Abroad.
"Normally what people are looking for is a peaceful home set in natural surroundings that is in close proximity to a local scene that has a good dose of its own unique culture and entertainment," he said.
A Cluttons France spokesperson said that the France was becoming very popular with a higher class of Brit who did not want to see "an English man wearing his football shirt in France".
The uncertainty surrounding the international stock market (French included) is leading more French households towards property investment. With UK property investors being put off by a deflating home market, following Les Francais is now distinguishing itself as the most attractive prospect.
Despite all the recent headlines about a certain broker, France is not a country of gamblers, far from it, so no wonder that French households prefer property to shares investment: the French concept of investment is all about security, traditional and predictable assets that will appreciate and be passed on to the next generation. According to the latest study from French newspaper Le Figaro, last month’s black Monday is very likely to push even more French households towards property, either now or once the stock market has stabilised. Least affected share holders are set to liquidate their portfolio and re-invest in bricks and mortar instead – as has already been the case last year following the ‘Dotcom’ crash.
‘So, where are the best buys? Danny Silver of PDF and John Grimes of Sotherby’s both predicted last year, the market is getting more and more refined and at a time where security prevails, the preferred locations are city centres, business parks and the niche luxury property market, which are a safer bet than rural areas and small towns - these logically see less demand from the home market, due to their more volatile appreciation, rental and resale potential.
Rental returns for Buy-to-Lets is likely to settle at around 5.5 to 6% p.a. rental returns this year (which remains attractive) and this percentage could decrease further the more you wait to invest due to the growing gap between property prices (linked to increasing market demands) and rental rates (linked to slow household wages’ increase). This is good news for people who have already invested or propose to do so in next months.
The predicted rise in French property investment and reported market appreciation are good news for British and Irish investors and following in French investors’ footsteps would definitely be a wise move which is set to pay off in the long run; the prospect of safety offered by realistically priced property with strong home demands will ensure good yields, resale potential and eventually return on investment.
So, in essence, there is no need to gamble to increase your profits: chose the safe route instead and avoid a lot of trouble! If only this could apply to some brokers.
Contact us for further info!
France now has the second largest population in Europe, with 63.8 million inhabitants, just behind Germany, and ahead of the United Kingdom (although it has a land mass over twice that of the UK).
According to the French statistical agency INSEE, the population of France grew by 0.6% last year, with 816,000 births and 71,000 new immigrants, set against 526,000 deaths.
France has the highest birth rate in Europe, alongside that of Ireland, whose figures for 2007 are not yet available.
Whilst the number of those getting married decreases, so civil partnerships continue to seduce an increasing number of couples. Around 400,000 couples are now in a civil partnership. The figures were sharply up in 2007 over 2006, in part no doubt to the change in inheritance law introduced by the Government granting the same tax status to both married and civil partnership couples.
Life expectancy continues to increase, and over the last ten years the life expectancy of men has increased by three years, whilst it has increased by two years for women.
Men now have a life expectancy of 77.5 years, and women 84.4 years. French women now have the highest life expectancy in Europe, whilst French men do not fair quite so well, being within the top third in Europe. Swedish men have the longest life expectancy in Europe (78.8 years).
The study also shows that the population in Southern France continues to grow at a faster rate than elsewhere, in part because of the drift of the population to popular regions in the South.
The Cote d’Azur, long time favourite destination, has begun to be eclipsed by the Montpelier-Bordeaux axis, passing through Toulouse. Indeed, Toulouse has seen one of the most spectacular population growths throughout France, with an increase of around 50,000 people over the 7 years.
Contrary to popular belief, most of the new migrants to the area are not retired persons, but those between 30-59 years, many of whom who have relocated in search of employment and a better lifestyle.
Potential changes to the French inheritance tax system are set to provide a boon to British investors looking to purchase property in the country, according to estate agent Unique Living.
As part of a package of reforms proposed by new president Nicolas Sarkozy, the inheritance tax threshold in France will be trebled.
This means only the top five per cent of properties are likely to be liable to pay the tax under the new régime – and as a result overseas investors are unlikely to pay any tax.
"As a company selling in France this is certainly good news," said Serge Cowan, managing director of Unique Living International Estate Agents.
"This will boost interest even further in investment in France, a country much loved by the British."
Homeworldwide.com is urging investors to take out mortgages in France in euros, to insulate cash from any potential deterioration in exchange rates as a result of falling interest rates.
Yet, the tax changes could outweigh these concerns.
"Most buyers now know that they can invest in France without fear of having their estate taxed when they die," concluded Mr Cowan.
"This has to be a great comfort and will naturally encourage further investment in this most charming of countries."
France may never be better value than it is now . Prices are steady at present but liable to go sharply higher as spring approaches due to borrowing in France is cheaper than ever for French tax payers because of new MIRAS-style tax breaks taking effect, as well as inheritance tax changes, which have freed up the market. Now is definitely the time to snap up an investment !
This advice is backed up by recent research, by the University of Paris – Dauphine (Economics); which shows that nearly half of house hunters looking to buy in France are still attracted by the good value property prices.
France has traditionally been a country that has offered overseas investors excellent value for money along with the safety and security so many are looking for, with low crime figures especially in rural areas. The survey shows that this French reputation for good value property still holds true, now more than ever.
In France, the situation regarding fixed rate mortgages is quite different – the French have always preferred and, indeed, still prefer a fixed rate for the entire term of the loan, which could be up to 30 years, depending on the age when the mortgage is taken out. And this is despite French banks encouraging them to take out a variable rate mortgage, or what in France they call ‘cape 2%’, which is similar to the UK and less risk for the bank.
It must be said that French people do not move as frequently as the British and US and they tend to plan for the longer term. They do not like interest only mortgages and prefer to pay off the capital - a very different mentality.
We saw levels of interest right up until the end of 2007, showing that the slowdown in the other market does not seem to have impacted upon the strength of demand. January figures show a 70% increase in investment over 2007 and the market seems to have escaped the worst of the sub prime fall-out in the USA.
There are three good reasons (Particularly is your base currency is £ sterling) why, if you are considering buying property in France, you should act now.
Interest rates in the UK are falling and if you have spare cash it will be eaten away by inflation as real rates of return fall.
Property prices are forecast to rise across France in 2008 by an average of 5% but in the Limousin house prices (Which are the lowest in France) will rise faster than this as they are starting from a lower base. The flip side of this is that if you have money invested in UK property, it is forecast to fall in value in 2008 and has started to do so even now.
The pound is weakening against the Euro as interest rates in the UK fall. They are forecast to fall further during 2008 as the Bank of England attempt to stimulate the UK economy.
All the above factors point to one solid conclusion – now is the time to buy your French property - waiting will cost you money. So make 2008 the year you buy your house in the Limousin and take the first step by contacting us now – You won’t be disappointed
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