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:
- Starting a family
- Children attending or changing school
- An elderly relative coming to live with you
- A change of job
- Chronic illness or death
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.