News on buy to let and property investment in Languedoc, south of France:
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Coastal Regions A Better Investment
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When it comes to buying a home in France, British buyers still like to be beside the seaside.
City-slicker Americans turn to properties in Paris, but British buyers prefer homes on the coast. They spend on average £54,814-£62,650 (€81,800-€93,500) in the Cotes-d'Armor and up to £244,586 (€365,000) for the greener low hills of the Ille-et-Vilaine, according to a new study from national French lender, Credit Foncier de France.
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The Brits Keep Coming
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British buyers are increasingly influential in France, as they make up more than 50% of the overseas property market, which last year was worth more than £4billion (€6billion).
More UK pensioners were retiring to France, because of its sun and excellent standard of healthcare, said Credit Foncier, and with more baby boomers approaching retirement age, the numbers were expected to increase even more. Americans tend to buy small apartments, with a kitchen and a bedroom — a pied-a-terre — the study says. Southern France remains a top choice for European buyers, including the Brits, although Paris, its region and the wine areas around Bordeaux are becoming more popular.
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Better buy-to-let returns in FRANCE
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With another UK interest rate rise expected in November and falling rental yields, experts say buy-to-let properties abroad are giving the best returns on investment.
A recent report by Prudential shows the average European rental yield is nearing 12% per annum, and property values are expected to continue to increase. Compare these to rental yields in the UK which currently average just over 6% - down from 7.22% in 2004 - in a market where the International Monetary Fund recently warned of a reduction in housing price inflation. When it comes to European rental yields, it pays to consider city apartments where demand is high, but the purchase price is low.
Jonathan Burridge, managing director of Quantum Mortgage Brokers, says overseas buy-to-lets are a viable investment option for many UK homeowners.
"By remortgaging and releasing the equity built up in their UK property stock, it is possible for people looking to invest in overseas property to benefit from a double whammy. Firstly, with most financial commentators predicting interest rate rises, locking into a fixed interest rate now will protect borrowers from the very real chance of further increases in monthly mortgage costs.
“Secondly, the capital raised can then be used to invest abroad, either to buy a property outright or to put a deposit down, limiting the overseas mortgage amount required. With rises in US Federal and EURO rates, domestic mortgages are becoming more competitive and certainly less costly and faster to arrange.”
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