Hints & Tips for Buying in France #3 - Pay the right price!
Ok, so you have this dream to buy a place in France where you can bring up your young family and enjoy a quality of life which is not available to you in the UK - right? Well, despite what people may say about there being a price differential between the UK and France this gap has come down in recent years. There has been a bit of a property boom in France, due to both French and English (and Dutch and other nationalities) pushing up prices in a desperate attempt to get on the (2nd home) ladder.
Whether this continues or not is up for debate. What is for sure, though, is that buying a home in France is not as cheap as it was a few years ago. The cost of buying, in terms of taxes and other fees, is still quite high, despite having come down in recent years. This additional cost is so often not taken into account when comparing prices. We grumble about the cost of stamp duty, but this pales into insignificance when compared with french buying costs.
I'm a firm believer that prices revert to the mean over time. So, I look at a graph of, say, prices over the past 40 years, then draw a trend line through the graph. If current prices are above this line then I suspect that prices may fall in the medium term. If the current prices are below this trend line then I suspect they may rise in years to come.
So, my advice would be:
1. Don't rush into an inappopriate purchase - don't buy at the top of the market just because everyone tells you it's the thing to do!
2. Negotiate with the owner - they know that buyers are desperate to 'own the lifestyle' and can be very optimistic when it comes to pricing their properties
3. Remember to add the purchase fees - it's not unusual for this to add 15%-20% to your purchase price
Whether this continues or not is up for debate. What is for sure, though, is that buying a home in France is not as cheap as it was a few years ago. The cost of buying, in terms of taxes and other fees, is still quite high, despite having come down in recent years. This additional cost is so often not taken into account when comparing prices. We grumble about the cost of stamp duty, but this pales into insignificance when compared with french buying costs.
I'm a firm believer that prices revert to the mean over time. So, I look at a graph of, say, prices over the past 40 years, then draw a trend line through the graph. If current prices are above this line then I suspect that prices may fall in the medium term. If the current prices are below this trend line then I suspect they may rise in years to come.
So, my advice would be:
1. Don't rush into an inappopriate purchase - don't buy at the top of the market just because everyone tells you it's the thing to do!
2. Negotiate with the owner - they know that buyers are desperate to 'own the lifestyle' and can be very optimistic when it comes to pricing their properties
3. Remember to add the purchase fees - it's not unusual for this to add 15%-20% to your purchase price
posted by The Boss @ 12:32 PM
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