Sunday, February 28, 2010

Property finders not always independent......

In a revealing article in Britain's Daily Telegraph, many of the country's largest estate agents are creating susidiary firms which act as property searchers, or 'buying agents', and which charge a fee and 'act independently for the buyer'. Among the firms cited are Private Property Search (Strutt & Parker), The Buying Solution (Knight Frank) and Prime Purchase (Savills).

Search fees can be as high as one or two percent of the property purchase price, usually with a minimum payment, in addition to any commission charged by the estate agency handling the transaction.

Among the advantages claimed by property searchers featured in the article were their in-depth knowledge of the local market, prices and property values - all of which, some commentators argue, should be the stock-in-trade of a competent estate agent; and leading potential users of such services in Britain to question where precisely is the added value?

Buying property in a foreign country such as France is a different matter, due to the language and a different system of law. In France, the estate agency sector is rigorously controlled, with estate agents licensed by the regional Prefecture and governed by the Loi Hoguet of January 1970.

One of the weaknesses of the French system however is the widespread use of 'commercial agents' - self-employed individuals attached by contract to an estate agency, who rely in turn for their legitimacy on the employing agency's licence and through which they obtain their personal 'carte professionnelle'.

The system can be open to abuse when an 'agent commercial' operates independently - as a property searcher or negotiator - and may have only a tenuous link with the employing estate agency, which could be one licensed in another Département. Some national networks rely on this method of working, and the estate agency professional body FNAIM have been critical of the system.

The status of property searchers working in France was clarified by a ministerial reply of 12 August 2008, which stated that an independent property searcher can legitimately act on behalf of a client, outside the provisions of the Loi Hoguet, provided he was paid a fee by the client and did not rely on a commission from the sale of a property (Journal Officiel Q. 20525, p. 6987).

This is the position adopted by my firm, and enables us to remain completely independent, when advising our clients on all aspects of living, working and buying property in France.

Source: (UK) Christopher Middleton, Daily Telegraph 26 February 2010

Saturday, February 20, 2010

French Property News February 2010

In this month's issue I look at the emerging organic movement in France and in particular my own region Pyrénées-Orientales, which has seen a doubling of organic producers in just 12 months. It seems that one of the effects of the economic crisis has been to encourage people to grow their own vegetables, explore local markets and not simply rely on supermrket standardised products that have been imported or travelled long distances, when they can be found locally.

I explain the different European labelling systems including the reliable French 'AB' symbol, and how to avoid meaningless descriptions such as 'farm fresh' or 'natural' which have no real validity.

French Property News is available on subscription and in newsagents. See

The British are back! Daily Telegraph

According to the Daily Telegraph, British buyers, who have become increasingly wary of investing in "emerging hotspots" (nonetheless heavily promoted by the British media at the time!) are now returning to the tried and tested French property market, with particular interest in Gascony, the Dordogne, the Loire Valley and the Mediterranean. This comes just months after an 80% drop in purchases by British buyers overseas during 2009, who own an estimated 430,000 holiday homes outside Britain, according to a report published by Savill's estate agency.

"The big news is the Brits are back" according to Knight Frank's French department. "It's a good time to buy. French property prices have fallen (not unversally true!) and there is a nice supply of good-quality properties at the right price on the market". More than 70% of the firm's enquiries so far this year have been from Britons with greatest interest in the south, the south west and the Alps.

As well as France's traditional attractions, potenial buyers are now citing proximity, including the option to drive or take the train, in addition to using low-coast flights and regional airports (80% of holiday homes are sited within easy driving distance of a regional airport). The warm southern weather, after a particularly severe British winter, is another plus, with the Mediterranean attracting the highest number of short break visitors to France, Spain and Italy. The survey estimates that 25% of holiday homes are located in France, 25% in Spain and a further 25% elsewhere in Europe.

Although some overseas owners felt their properties had lost some of their value, this was compensated for by the increase in rentals, some owners letting out their properties for the first time. Three and four bedroom houses proved particularly popular with seasonal renters during 2009. The report also notes that period properties are increasing in popularity, provided they are ready to move into and do not require renovations; in contrast to recent trends for purpose-built resorts. Three-quarters of holiday homes cost less than £300,000 and just under half less than £200,000 - easily achievable in my region of Languedoc-Roussillon.

Here we have escaped the worst of the winter weather, with the Pyrénées-Orientales Mediterranean region particularly well protected by its sourrounding hills - the Albères to the north, Mont Canigou to the west and the Pyrenees to the south, in line with the traditional boast of 300 days of sunshine a year. And remember, we are less than two hours drive across the Spanish border to the Costa Brava!

Property prices have generally remained stable in contrast to the 10 to 30 per cent drop in some areas, particularly inland Spain, where some owners who purchased on a 75% mortgage are now in negative equity, according to the survey.

My local estate agency colleagues report an increase in enquiries from both British and French clients in the first two months of 2010 and I am currently advising a number of clients who are in the process of buying property in the region.

Sources: Zoe Dare Hall, Daily Telegraph, Friday 19 February 2010; Graham Norwood, Daily Telegraph, Friday 26 February 2010; Rebecca Gill, Savill's estate agency, UK, author of the Report.

Saturday, February 13, 2010

D I Y home valuations

As part of Britain's growing anti-estate agent movement (according to the Daily Telegraph), property owners are now turning to the internet and logging onto sites such as the Land Registery or to get an instant online valuation of their home.

Criticis of this approach argue that such sites are only as good as the data they contain, based mainly on price comparisons of 'similar' properties recently sold, and therefore not much use in the case of an isolated rural property in an area where nothing has sold for the last 20 years. Here where I live on France's Mediterranean coast, I know the average value of a two-bed beachfront apartment, but would have more difficulty giving a spot appraisal of a detached house with garden, located 5 miles inland.

The owners of Zoopla admit that their estimates rely mainly on data supplied by the user along with a 'confidence index' and advise getting a second opinion. And one English estate agent is quoted as saying 'you may as well rely on a clairvoyant'.

When the author of the article, Anna Tyzack, called in half a dozen estate agents to value her 'tiny London flat', estimates varied by as much as £150,000 and when the flat was sold seven months later it reached the mid-point of the various estimates but higher than the figure suggested online.

All the agents however were familiar with the sale prices achieved for other flats in the same street, showing once again that - as with property searching - there is no substitute for local knowledge from the person on the spot.

French estate agents will at best offer an 'estimation' which is often less than the price a vendor hopes to achieve, and may choose not to take a property onto their books knowing that it is impossible to sell at the asking price demanded.

French property prices on the whole have not dipped dramatically even in recent months, and where there is a sudden large reduction it is invariably the result of a hard-pressed vendor coming to his senses and finally accepting the agent's estimate. 'Properties simply do not sell if they are incorrectly priced' one local French agent confirms, 'but vendors often have their own ideas and we can do little to change that until they find their property stuck in the market place'.

Source: Daily Telegraph, 12 February 2010

Thursday, February 11, 2010

An architect for 12 euros per square metre?

French architects, tired of being seen as expensive and beyond the reach of ordinary users, are hitting back with a series of initiatives designed to demystify the profession and offer a number of low-cost alternatives.

They have been helped by popular TV programmes such as 'Question Maison' on M6 and in particular the part of the programme 'SOS Maison' which features the work of young Paris-based architect Philippe Demougeot DPLG, author of three books and a specialist is re-designing small spaces. The programme receives 3,000 requests a week for his help, in which he visits a small apartment or studio, and proposes a design solution. Part of the cost of the building work is borne by the programme.

In February, Le Figaro newspaper described two new internet-based services, in which clients can submit room plans and pictures by email to a central office, and receive in return the services of a low-cost architect. This will include a basic design, recommended suppliers and artisans, and choice of furniture (

The second online service ( offers a series of design packages, ranging from just over 1000 euros to under 2000 euros, from a single room to studios, apartments and houses. The studio package costs 1189 euros tax included, and includes a visit by an architect, a plan up to 35m², two concept illustrations and an estimate of costs of the building work.

Le Figaro suggests that these low-cost services may be particularly attractive to intending buyers wanting to explore the potential of a property before committing themselves.

For more information consult the above websites; also Philippe Demougeot's two recent books 'SOS Maison avant et après' (2006) and 'SOS Maison libérons l'espace' (2007), both Editions Hoebeke, Paris; 'Questions Maison'; also the excellent series 'Archi Pas Chère' published by Edtions Ouest-France, which feature architect designed houses that cost under 100,000 euros, and a third volume on low-cost home extensions.

Sunday, February 7, 2010

What is my home worth?

The answer to this question could be 'It depends who's asking', according to an article in the UK Daily Telegraph. Citing the experiences of three typical British property sellers, the author Graham Norwood found that valuations could vary widely, depending whether they were given by estate agents, professional valuers or experts working on behalf of banks or insurance companies.

Local estate agents tended to value properties in line with 'similar' ones in the same area, relying for guidance on past sales, prices asked and the acutal amounts achieved. "Most agents simply make appraisals of a property and produce a figure that sits well in the local market" according to Peter Bolton-King of the National Association of Estate Agents. He admits there is also a tendency to pitch high in a rising market, and low in a stagnant market.

Surveyors working on behalf of banks, according to Bolton-King, err on the side of caution, in the interests of protecting the lenders, particularly in the case of new-build properties, which he argues are consistently under-valued.

The Royal Institution of Chartered Surveyors (RICS) issues its own 'Red Book' guide to valuation and says that looking at recent property sales are only a partial guide to a property's worth.

A comparable 400-page French manual offers comprehensive guidelines on how to value properties as diverse as apartments to commercial premises held on lease, using varying approaches including price comparison. However the manual distinguishes between physical value (broadly what it cost to build or replace the property), taxable value, judicial value and social/economic value. An attractive property with a high physical value could see this reduced if it were encumbered, for example, by onerous long-term leases (offering high levels of protection to sitting tenants), or planned local developments, such as road widening or a supermarket, both of which could detract from the property's other values.

Considerations such as these illustrate the weakness of valuation only by price comparison, and reliance on online 'automated valuation models' that offer property valuations based on data input from sources such as local councils and the land registry, rather than a personal inspection by a local estate agent or valuer. Although properties in the same area or even the same street may appear similar in size and type of accommodation, one could be tastefully decorated and maintained, and the other represent a DIY nightmare.

As with all property searching, there is absolutely no substitute for a personal visit and local knowledge of the current property market, the locality and the individual property.

Source: Daily Telegraph, 05 February 2010.

Tuesday, February 2, 2010

French Property News January 2010

In this month's French Property News I have reiterated some of the basic rules for buying a second home in France, including location, short and long term rental potential, the widely differing rental markets, and doing your sums when looking at the cost of purchase against anticipated income from your investment. Interestingly, half of all second homes are sold by their owners within ten year of purchase, an indication that there is a buoyant market even at a time of slowdown in the property sector.

French Property News is available in newsagents or on subscription.

Monday, February 1, 2010

Fancy living in a 'sousplex'? Beware...

The French housing crisis has encouraged Paris estate agents to invent a new type of property, the 'sousplex'. A reverse of the more commonly known duplex, the 'sousplex' consists of a ground and basement level living area and makes use of many former unexploited areas of typical city centre apartment blocks.

However, potential buyers should be aware that many recent conversions are in fact illegal as, under current planning regulations, all living rooms (including bedrooms) are required to have normal height windows, not just a ventilator at pavement level. Whole streets are also designated as 'commercial' where planning consent will not be given for conversion of former boutiques and workshops into living accommodation.

However, because planning departments are notoriously under-staffed, many building conversions go unchecked, or are carried out without planning permission or the agreement of the building co-owners - or occasionally with their connivance. The result is that many owners find they have bought an unsaleable property, unless they can secure retrospective planning consent and the approval of the co-owners at their annual general meeting. Neither are easy to obtain and can not be guaranteed.

Among the advantages cited by promoters of this type of property are lower purchase costs, sometimes 30% less than traditional apartments (but conversion costs can be high); lower taxes as some parts may not be officially designated as living space; and the chance to create vast areas of open-plan living accommodation. They have a particular appeal to fashionable young couples who like entertaining and parents with large families.

As always, professional advice should be sought as to the feasibility and legality of any proposed building conversion, before committing to purchase.