Scandal of French pensions

Those of us living in France and in receipt of a Bitish state pension - which may not be over-generous but arrives on time - may sympathise with their French neighbours still waiting for  their first payment , in some cases two years after they reached the age of entitlement.

This worrying situation was revealed last night in the TV programme "C'est dans l'air" (Channel 5, 17:45) which examined the failure of every government  during the last three décades to reform the French pensions service. Not only have the French insisted for the most part that retirement starts at age 60 (when virtually every other country in Europe has raised the official retirement age to cope with shorter working lives and longer life expectancy) but the system relies on a multiplicity of semi-private providers (known as "caisses") depending on your occupation, with only public sector pensions being the direct responsibility of the government.

As you change jobs, you change pension provider, and calculating - and paying - your final pension depends on your last provider, who has the task of assembling information from all of the pensioner's previous assurers. It is this task which is causing serious delays and the programme highlighted two couples still awaiting their first pension payment two years after the husbands finished work. They are meanwhile relying on their savings, the help of family and friends, charities and state handouts. One particular "caisse" had a backlog of five thousand similar cases and had closed its office to the public in order to try and deal with the situation.

One of the programme's commentators noted that the situation was particularly critical in certain regions of France, and highlighted the north east and Languedoc-Roussillon as among the worst.

Paris mayor targeting private apartments

The recently elected socialist mayor of Paris has revealed détails of their plans to buy individual apartments in private buildings and turn them into 'social housing'. The policy is not without its critics and among them are those voiced by FNAIM, the estate agents' Professional body, including:

- the high cost, where 'typical' social housing costs around 4500 euros per square metre, in some parts of Paris average prices are 6730 - 9000 euros per square metre.

- the problems of creating mixed occupancy apartment blocks, resulting in conflicts between private owners/renters and occupants of apartments owned by the Mairie as social housing.

- high annual charges for building maintenance and professional management, and concerns that costs will fall on private owners, while the Mairie will pay the costs of the apartments they own. Just as happened in Britain under the 'right to buy' scheme which created mixed-occupancy Council blocks.

- prices being forced down as vendors seeking to sell and retire to the warm South try to offload their property (some 8 million French 'baby-boomers' are estimated to reach retirement age over the next ten years).

As with much recent policy there are serious doubts that this one will work - like the Duflot scheme to buy up redundant buildings and convert them into social housing, which produced virtually nil results. Ironicallly, at the same moment this new policy was being announced, the sudden ban on wood burning fires in Paris was suddenly dropped after widespread protest. It seems the present government just can't get it right.

 

Tiny houses come to France

Good news for those thinking of acquiring a (first) property in France or simply interested in 'downsizing'. The tiny house movement, which originated in America, is starting to gain ground in France, according to an article in today's LeFigaro online edition (lefigaro.fr). They refer to a French website ( latinyhouse.com) which shows examples of tiny homes (on wheels to get round certain planning regulations) and the site is full of practical advice including an update on current French local planning laws.

If your French is not up to scratch, you could start by looking at a similar, very comprehensive, American website (thetinylife.com) which again shows numerous examples, including the interiors of some small apartments and studios (I particularly liked one shown in Paris).

Many of the earlier tiny houses in America tended to look like a garden shed on wheels (the wheels again essential due to planning laws) but the recession and a desire for an alternative lifestyle has encouraged architects, manufacturers and town planners to look at alternative ways of creating small homes. Many that were initially designated as 'emergency' or 'temporary' accommodation are being seen as having an important role in solving the country's perennial housing crisis.  All this is in marked contrast to the trend to build larger and larger homes - dubbed McMansions by their critics - averaging over 2000ft² (nearly 200m²), apart of course from city centres commanding high prices.

The first encouraging signs in France include the recent launch of the first site using recycled shipping containers (well known in the Netherlands and Britain) and an easing of local planning restrictions. What is surprising in the area where I live on the Mediteranian coast is that permanent mobile home parks are virtually non-existent, apart from those providing for 'travellers'.

I have just moved from the coast to my nearest large town and opted for a third floor/no lift town centre property, where small apartments are still cheap, as the current trend is to move to suburbia, close to the huge out-of-town shopping centres. All this is at the cost of buying up former aagricultural land, much of it previously used for wine growing, and resulting in a decline of the centre (closure of shops, cafés, bars and restaurants). The Mairie has embarked on an ambitious programme of restoring many of the older buildings and historic sites, and creating an annexe to the local university (situated in the suburbs) which will bring some 500 students to follow their courses in the town centre. The site chosen is that of the original university which dates back several centuries.

All this is very encouraging.





 

Further crackdown on (unoccupied) second homes

An unconfirmed report this morning by AFP claims that the French government is considering allowing an increase of up to 20% on the 'taxe foncière' paid on (unoccupied) second home, in certain areas of France, where there is a housing shortage and lack of affordable rentals. No-one was available to comment on behalf of the government.

The report claimed that in Paris one in six dwellings is a 'résidence secondaire' and an investigative programme on French TV last night showed an inspector from the Mairie tracking apartments let short term to visitors and tourists but registered by their owners as their main residence. In one case, a family in Bordeaux owned six or more such apartments in Paris, all let furnished short term. The Mairie has for some time been imposing fines and other penalties, and insisting owners re-classify their (rental) properties as a business, subject to the usual tax and social security regimes.

 

French expatriates in the UK

The French government have recently published a long (600+ pages) report about the number of French people living abroad, each side of the political Spectrum attempting to blame the other for this flight of capital and brainpower.

To put the raw figures into perspective, the report estimates that 2.5% of French live abroad, of which 4.5% are in Germany and 6% (the highest number) are in the UK.

The overall percentage (2.5%) - or 1.6 million people - reflects a 35% increase in emigration in 10 years.

Right wing politicians have emphasised the increase in emigration by 20% in 2012 compared with 2011 and blame the socialist government of M Hollande.

Analysts argue that the majority of younger emigrants leave the country principally to find work or self-employment, while older, wealthier people are escaping high French taxes. Corporations which leave France do it largely because of high French social charges and corporation tax.

Principal source: LeFigaro online 16 October 2014

 

Practical tipes for moving house in France

Moving from one home to another within France can be a traumatic experience but having recently moved from one apartment to another, I offer some practical tips based on my experience.

1. Selling and buying at the same time
I was in fact selling one apartment and planning to buy another with the proceeds. Originally I imagined I would complete the sale, move into temporary accommodation and look around for my new home. As it turned out I found the apartment of my dreams while in the middle of selling my existing home and as a result had to carefully co-ordinate the sale/purchase process so that final contracts would be completed on the same day. This was not easy as it included having to move out of my existing apartment (before it cas actually 'sold') and put my furniture into storage for a few days, and was not allowed to move into my new apartment before I had actually bought it!

2. Temporary storage
Fortunately I had kind friends prepared to help me with the move and they ended up storing my belongings in their garage and at another apartment, where I was allowed to stay. Not ideal as it involved several moves. If you are using Professional removers, they will normally offer temporary storage as part of their service. Otherwise you can rent temporary storage space, from a few cubic metres upwards. Look in Pages Jaunes (French Yellow Pages) Under the rubric 'garde meuble'.

3. Reading the meters - electricity, gas, water
Normally the agent handling the sale will take care of this and notify the utility companies so that your buyer can take these over and any outstanding bills can be sent to you. Advisable to keep a recent bill with your account détails for reference. Same process for the property you are about to buy.

4. Telephone and Internet
These are normally your responsibility but there is not a lot you can do until you have received from your Notaire (on the days of completion) copies of an attestation (sworn statement) that you have sold your  property and are the owner of the new one. Armed with these documents and your current phone and internet contracts the simplest way is to visit your nearest phone shop (depending on your suppler) and arrange for transfer of your contracts. I am with FT/Orange the service was restored - with a new phone number - within a week.

5. Mail redirection
La Poste offer this service, for a minimum of one month (€23) and you need to arrange this five days in advance. You must have a letterbox clearly marked with your name at your new address before the facteur will deliver mail to you. They will not put mail into an unmarked letter box. It is also advisable to send 'change of address' notices to your (UK) bank, credit card companies, your French healthcare provider, the UK pensions service etc so that they know you have moved.

6. Insurances
You are responsible for insuring your new home from the moment it becomes yours, so speak to your insurers in advance. To cancel the insurance on your previous home, your insurers will need a copy of the attestation noted above (3).

7. Doctor, dentists etc
If you have moved too far from your existing doctor you will need to find a new médecin traitant (your registered doctor) as soon as possible. The local Mairie may have lists of local doctors, otherwise it is a question of asking around or using Yellos Pages.

8. Rubbish removal
Essential to check arrangements for providing dustbins and rubbish collection, and as I found while moving in, how you can get rid of 'encombrants' - items that are too large to go into the bin such as packaging etc. In some communes there is a service available by telephone for their removal by arrangement, all you have to do is notify them and leave them out the night before.

Hope these few tips help make your removal go a little more smoothly!

Decline of city centres

France also is suffering a serious decline of its city centres, in much the same way as Britain and other developed western countries.

Having just moved from an apartment on the Mediterranian coat to a third-floor mini-loft right in the centre of my  nearest town (pop. 125 000) I was interested to read of the disappearance of over 25% of the restaurants - a drop from 258 to 190 establishments, of which 70 classed as 'town centre'. In terms of potential diners ('covers') this represents a reduction  of 158 covers to 10 640 since 2010.

What the town centre has lost the periphery has gained, along with the development of four major out-of-town shopping centres catering for every need. Here the gain has been in the order of 80% in four years, and overall comprises 72 establishments or 11 601 covers. At the four principal sites the number of restaurants has risen from 14 to 34 (148% increase) during the last four years.

It is clear from the figures that people are still eating-out and combining this with a one-stop shopping trip. I have already noted in the few days I have been established in my new apartment that, now that the summer season has passed, the town centre is busy only on Saturdays, totally dead on Sundays (when people tend to go to the coast), very quiet on Mondays (many establishments use this as their obligatory day off) and relatively quiet for the rest of the week.

The report on restaurant closures follows earlier concerns about the closure of town-centre shops and boutiques - over 50 in recent months, including some of the principal high street giants as well as smaller specialist boutiques.

Who is to blame? It is clear that many areas of the town centre are in decline and the local Council has done little to re-build and re-furbish some parts of the historic centre. Some of the nice buildings stand cheek by jowl with with neglected buildings. Structural collapses are not uncommon in the poorest areas.

There are the usual arguments with lack of parking compared with pedestrianistion and happily an ugly mutli-storey car parking in the principal square has been destroyed and the resultant Place de la République brought  back to life, with literally hundreds of people eating and drinking outdoors on the many cafés and restaurants.

The local authority has also noted the effect of having the local university (10 000 students) located out of town and there are plans to develop classrooms and other facilities in the centre for some 500 students, in an attempt to 'diversify' the population mix. All this is good news.

Source/ L'Indépendant, 25 September 2014.

French property market reviving?

Despite the many problems associated with the French economy (unemployment, reduced manufacturing output, out-of-control public spending etc) there are nonetheless encouraging signs of an improvement in the property market.

According to figures released by Notaires de France, which record actual sales completed, there were 740 000 property transactions in the 12 months to end of March 2014, a year-on-year increase of 12 per cent.

Overall prices of both houses and apartments dropped by just over 1 per cent, but there were significant rises in some specific areas, showing once again that the French property market is highly fragmented and cannot be judged as a whole.

In the case of houses, highest price rises were recorded in Nimes (12.3%), Nantes (6.8%), Marseilles/Aix-en-Provence (5.5%) and Montpellier (4.5%); and for apartments - Bordeaux (12.2%), Metz (8.3%), Tours (6.4%) and Nancy (3.8%).

With the pound sterling remaining strong against the Euro, now is a good time to buy French property.

 

Selling apartment without car parking space - tips and pitfalls

I am currently selling my apartment which does not have a car parking space (I sold it several years ago just after I moved in). However the buyer of my apartment needs a parking space and to buy one separately can be costly - as the transaction costs can exceed the value of the car parking space! It is just like selling any other piece of real estate and land registration charges apply, in this case based on a minimum cost which cannot be avoided.

Fortunately the agent handling my sale had a couple of car parking spaces on his books, and to help my buyer and alleviate the transaction costs, we have associated the car parking space (owned by another individual in my building) with the sale of my apartment, using the same contract.

Everyone was happy with this arrangement until, alas, we came to sign the compromis de vente or pre-contract, which had taken five weeks to prepare under the new Duffflot/Alur rules I talk about in the post below. At the last moment the owner of the parking space decided he did not wish to sell, and as a result the whole transaction collapsed - just as I was putting an offer on aother flat in a nearby town.

Despair and annoyance all round, until my ressourceful estate agent said he had another seller, with another car parking space on his books - and willing to sell! As a result our notaires are now urgently preparing a a new compromis de vente (the first one has had to be scrapped) and both the buyers of my apartment and the seller of the car park space have agreed to give power of attorney (in French a procuration) to save time and avoid unnecessary visits to the notaire's office, until we all meet again in a few weeks to sign the acte finale and complete the purchase.

I alerted the agent handling my purchase and happily its resolution, and my offer has been accepted, and the notaires are now also preparing the compromis for my purchase.

What started out as a gesture to help my buyer in the event could have led to the collapse of the whole transaction, but thanks to my agent we are now back on course. I know from experience that every transaction can be complicated and my own has been no exception!

 

Property searching

As well as selling my existing home, I am also starting to search for another apartment - this time away from the coast and in the nearest large town. Despite - or perhaps because of - the slowdown in the French property market there is a huge choice of small apartments of the sort I am looking for. And after a couple of frustrating weeks, literally overwhelmes by the wide selection on officer, I decided that in order to save time - and stay sane - I must revise and stick to my list of requirements. I hope it may help others caught up in a property search. My advice to myself is:

- Accept there is a huge choice, draw up a list of what is acceptable and what is not - and stick to your rules!

 - Best concentrate on one or two selected areas, get to know them through regular visits, and decide if this is where you would actually be happy to live. Visit at different times of day/evening, at weekends, literally check out you possible future neighbours!

- Look at For Sale boards (agents or private sellers), LeBoncoin etc and spend time looking at potential properties from the outside before even arranging a visit, to see how they fit into the area, and may put you off - a noisy street, a bar opposite, absence of parking etc. These are the sort of things you cannot change, and you need to decide if they are unacceptable or you could live with them.

- Look at the general condition of the property - outside painting, state of the front door, are there hastily printed names next to the doorbells indicating high turnover of occupants etc. Look at the state of Windows and curtains, also cars parked outside (always a reliable indicator).

- My practical half tells me I should buy a ground floor property (looking ahead to old age etc) so I tell myself to stop dreaming of attics and lofts!

- How small? How large? Given that every square metre costs money in taxes, charges and heating bills, be realistic about how much space you really need. Maybe now is the ideal time to review how much 'stuff' you own and start paring down your possessions.

- Looking ahead, just in case, is the property resellable? I like atypical properties - former shops or workshops, lofts etc - but atypical properties need atypical buyers if you have to sell in the future.

- Agents' détails often miss out the most important things and even before visiting you need to have your own checklist - what floor is the property on, taxes, management charges, future works planned for which you will have to pay, are the building managers a large company or is the property managed by a group of volunteer residents?

And when you finally get to look Inside:

- Remember that floors, walls and ceiling can be changed; a new kitchen or bathroom installed - factor in these potential costs.

Good hunting!



 

Apartment sale (2)

Further to my post of 30 May below, I am now in the process of selling my apartment under the new regulations required by the loi Duflot/ALUR , which requires the vendor provide a lot of additional information about the property, some of which was normally made available only at the signature of the acte finale (final document completing the sale) but which now has to be available to the potential buyer before he/she signs the compromis de vente (or pre-contract) and is asked to make a down payment on account, normally based on 10% of the sale price.

As noted below, the new procedures can delay the preparation and signature of the compromis de vente by, according to some estimates, 4 to 6 weeks - leaving the vendor in a position of uncertainty as to whether he has a genuine sale or not. As I wish to buy another property as soon as my present one is sold, it is difficult to agree any firm offers as my purchase will depend on my sale. Working closely with my agent and in cooperation with the buyer, we have taken the following steps which I would recommend to others involved in selling their apartment within  a co-ownership (copropriété) building:

1. I have confirmed with the syndic (building managers) that the charge they will make for supplying the documents required related to the history and management of the building - this will be made of a charge of €400 frais de mutation (change of ownership of the apartment) and an additional €250 for providint eh remaining documents.

2. I have signed and the buyer has countersigned a 'letter of intent to buy'  (lettre d'intention d'achat) which sets out the main terms and conditions that we are asking the notaire to include in the comromis de vente, including:
- Détails of the buyer and seller, description and address of the property
- Confirmation of the sale price including the agent's commission
- Confirmation that the buyer intends paying cash and is not seeking a bank loan or mortgage (this ensures that his cooling-off period (droit de réflexion) will be just seven days after signature of the compromis.
- Confirmation of the likely timescale for preparation and signature of the compromis and if all goes well, final completion.

This is very helpful for me as vendor and once the compromis is signed and a deposit lodged with the notaire, I am in a better position to start looking for another property and making a tentative offer using the above procedure. As my buyer does not wish to move in until early September, I am hoping to complete my purchase to coincide, thus avoiding the need to put my furniture in storage, and hopefully I will move directly from my old apartment to my new one. Fingers crossed!

I will post more information over the coming weeks as it happens.



 

New law adds to cost of apartment sales

A new law, introduced in March as an extension of the loi Dufflot concerning apartments owned within a condominium ('co-propiété'), adds considerably to the costs to be borne by the owner anticipating a sale.

Peomoted ostensibly as an additional measure designed to protect incoming tenants or buyers, the new loi ALUR requires vendors to provide additional information about the management of the building, what works have been undertaken or are planned, details of charges and a three year history of 'the state of the building fabric' - information than can only be obtained from the professional syndic (building managers) who are charging - heavily - for providing this information from their files.

It should be noted that these new requirements are in addition to the expert survey ("expertises") that already have to be provided covering lead, asbestos, termites, electrical safety etc; and the recently added 'energy efficiency certificate'. The new law also requires this package of documents to be assembled and made available to the potential buyer before the pre-contract ("compromis de vente") is signed - and before any cash deposit is handed over, as a sign of the buyer's good faith.

Coupled with the delays being quoted of four to six weeks, this now means that vendors now enter a lengthy period of uncertainty even before the buyer has the right to invoke the traditional seven-day cooling-off period (which can in turn be extended to another six weeks or so if the buyer is seeking to secure bank financing for the purchase). The fact that these new procedures will dramatically slow down the transaction process, in a property market that it already stagnant, appears not to have occurred to the leglislators.

For vendors trying to sell their property and possibly move elsewhere, the additional costs are a serious deterrent and will result in price increases. It is difficult to estimate at the time of writing how much the professional syndics intend to charge for providing the additional information required. But I spoke to two agencies one of whom had been told 'about €400', while another was quoted 'between €600 and 1000' - by the same office of the same syndic (Foncia)! Toether with the expert reports and energy certificate, costs to vendors to present their property for signature of the 'compromis de vente' could be in the order of €2000 - a pre-contract that the would-be buyer may or may not be prepared to sign.

A further question to which I have had no satisfactory reply is, in the event that the buyer decides not to proceed with the purchase, who is responsible for paying the costs incurred to date - bearing in mind that no deposit has been taken, and buyer may not even have entered the cooling-off period at this stage. In addition he/she may have exercised their legitimate right to view and express their interest in one or more other properties, without commitment of any kind, meanwhile encouraging further owner(s) to prepare the document bundle in the reasonable expectation of a sale.

Note that the new laws concern only co-ownership properties such as apartments within a "résidence" or complex managed by a syndic. The costs are inevitably going to hit hardest those living in and trying to sell the most property - particularly as the documentation relating to the building complex is much the same when you are selling a 20m² studio or a five-roomed penthouse.  And it is not unimaginable to assume that the larger and poorer the building complex, the more voluminous (and costly) the building reports.

Comments by property professionals have been critical of the unpreparedness of the syndics to furnish this information. My own view is that what set out to provide additional protection for potential renters and buyers has become a nightmare for vendors, many of them desperate to sell and move on. The legislation in my view is sloppily conceived and drafted with little appreciation of its practical effects on the property market and on individuals trying to survive in a continuing depressed French economy.

 

French property prices in 2014 - mixed views

There appears to be a mix of views of where French property prices are likely to go in 2014, although contrary to populist views in the British press of untold bargains to be had, French predictions are considerably less exciting.

According to the most recent report* I have read, Standard & Poors predict an average fall of 4% and two major French banks - Crédit Agricole and Credit Foncier - between 4 and 5 per cent. The French estate agents association FNAIM talk of 'not more than 4%' though agency chains predict a more modest drop in prices - Century-21 1.8%, Laforet less than 2% and Guy Hoquet between 0 and 2%.

Historically, there were average falls of 3% in 2008 and 7% in 2009, but average rises of 10 and occasionally 15 per cent were recorded in some French cities during 2010. According to Notaires de France, the average fall in 2013 was 1.7% overall.

Transactions are still down on the average 829 000 recorded annually in the boom years between 1999 and 2007, with a total 723 000 transactions recorded in 2013, 2.7% fewer than in 2012.

As always, price rises and falls depend on numerous factors, such as the age, condition and location of the property; and no two properties may be the same even within the same area, even the same street. It pays to keep an open mind and listen to the advice from professionals on the spot.

* sofinscope.actu.orange.fr

French Property News, May 2014

In this month's issue - which is a 'special' dedicated to setting up and running a successful business in France, I have written a piece taking stock of where France is in May 2014, just having voted in the local elections and with European élections due at the end of May. It is also signals the end of François Hollande's second year as President (with another three years to run).

Now that the piece has appeared we know the result of the local elections - significant losses for the socialists, gains for the UMP (Mr Sarkozy's party) and for the National Front. The most striking effect has been the sacking of the prime minister (Mr Ayrault) by Mr Hollande and the appontment of Manuel Vals, former interior minister, in his place. There have been some resignations, including the former ecologist housing minister Cécile Duflot.

The most striking changes are a reduction in the number of ministers to about half of the previous government, and greater reliance on 'ministers of state'. The intention is to have a smaller inner working cabinet headed by Valls. It is probably too early to comment but critics suggest that the new government is largely re-hashing older policies, when what is required, they argue, are significant reductions in public expenditure, urgent action to reduce unemployment and concrete measures to increase productivity.

For the property sector, no significant new policies have yet been announced though the country's demographic profile may be enough to get the market moving again. With some three million pensioners expected to enter retirment in the next decade, it is predicted that many of them - already property owners - will want to dispose of their larger principal homes, usually located in the northern half of the country, and join the exodus South to the sun. As a result there is a growing market for new-build properties and for alternatives such as timber construction, and an emphasis on energy saving, with an eye on the future.

French Property News is available from newsagents or on subscription. www.french-property-news.com

What buyers like and dislike - survey

According to a Survey published in the Daily Mail* abd conducted by a property website** among 2000 house-hunters, the following features are most frequently liked/disliked when viewing a property with the intention to buy:

Attractive features:

Fitted kitchen (36%)
Granite kitchen surfaces (31%)
Wooden floors (23%)
Wood burning stove (22%)
Concealed appliances (21ù°
Neutral colour scheme (20%)
American fridge-freezer (16%)
Aga range/cooker (18%)
Heated towel rails (16%)
Roll-top bath (15%)

Unattractive features

Woodchip wallpaper (39%)
Mirrored ceilings (36%)
Nude portraits (35%)
Avocado bathroom suites (31%)
Taxidermy (24%)
1880s DIY painte effects (rag olling etc) (20%)
Strip lighting (17%)
Artex ceilings (16%)
Themed rooms (12%)
Hot tub (11%)

What I found surprising about the results, and was confirmed by some of the reader comments, is that most of the features which are liked or disliked are primarily 'cosmetic' and could be changed or installed by the new owners (decoration, kitchen fitments etc) or might not even be left behind by the vendors (such as kitchen appliances). Also there is no reference to aspect, location, neighbours, state of the building fabric etc.

Some of the dislikes are regularly mentioned on French TV programmes such as Stephan Plaza's 'Recherche Apartment ou Maison' including stuffed animales, displays of fire-arms and virtually any extremes of decor, themes (Western, 1950s etc). The advice as always is to present a neutral, bland interior designed to appeal to the widest category of potential buyer.

On another note, I have just been reading a similar US Survey*** on what Americans like or dislike about (other people's bathrooms). There were over 170 reader comments, on burning issues such as when the loo seat should be left up or down or whether a (lidded or not) trash can should be installed.

Reading this article I think I learnt more about the American psyche than you could possibly learn from years of study.

Sources: *dailymail.co.uk  **needaProperty.com  ***apartmenttherapy.com
 

French Property News, April 2014

In this special issue of French Property News* dedicated to 'all you need to know for a new life in France' I have tried to paint a broad picture - in just a couple of pages! - of some of the issues facing France today. They include the dire state of the French economy, record levels of unemployment and general dissatisfaction with the policies of François Hollande's socialist (sort-of) government.

As I write this post, it is the morning after the first round of the French local elections, with a record level of abstentions (40% have not bothered to vote), the advance of the right over the socialists and in particular the gains by the National Front. They have topped the poll in my nearest large town, Perpignan. A lot of this may be corrected in the second round next Sunday as voters contemplate the results so far registered.

In my article I also touch on issues such as France's complex ethnic mix which results from two world wars, the Occupation and the Civil War in Spain, and the close ties of family and friendship which many 'outsiders' may not be able to understand or even be aware of.

Essential reading before yu buy your French property!

*French Property News, available at newsagents or on subscription. www.french-property-news.com

New French property legislation

Then French government has finally approved legislation which offers even more security for tenants in unfurnished properties in certain designated cities, including Paris, Marseille and Lille and several designated towns where housing is considered critical. There is also some help for landlords in the private sector with plans for a state funded insurance guarantee against unpaid rentals, for a maximum of 18 months and starting from January 2016.

Within the designated towns, local authorities will determin a mean rental to be applied to different property types (studio, two rooms etc) and by quartier , which will become the standard. The housing minister Cécile Duflot predicts that this will lead to widespread rent réductions. The new leglislation clarified what information a landlord may ask a prospective tenant to supply before offering a rental contract.

Mme Duflot has also attacked the lucrative short-term rental market, composed of the many attractive furnished studios and small apartments, currently rented for as little as a seekend to tourists in cities such as Paris. These rentals are extremely popular with visitors as an alternative to hotels but have caused problems in blocks occupied by a mix of long-term residents and short-term renters. Tourist hotels have also complained of loss of trade. The right wing newspaper Le Figaro has suggested there will be a large-scale exit of investors in this type of property to countries such as Spain with more flexible regimes. If so this may free up a number of desirable small properties in central Paris.

Decline of the city centre

Like many towns in Britain, France is also suffering from the decline of the traditional city centre. None more so than my nearest large town Perpignan.

The problem is that Perpignan is sourrounded by out-of-town shopping centres to the north (2 large sites) and south (two sites), another on the coast road towards Canet, and a fourth off-centre site dominanted by ELeclerc.  built around huge hypermarkets such as Auchan and Carrefour. They offer one-stop shopping, ease of parking, a choice of restaurants etc all within easy walking distance, often under cover.

As a result of these huge developments and the difficulty of driving and parking in Perpignan, the town centre has lost up to 60 shops recently, plus the closure of an entire covered acrcade - due in this case to a proposed 33% increase in rents at the height of the crisis. Many streets are now neglected and whole areas turning into near-slums, despite featuring attractive old buildings crying out for restoration. A sad sight.

To the west of the city centre an ambitious shopping complex built around the new TGV station has also suffered. Named 'El centre del mon' (the centre of the world) after Salvador Dali's famous description, the centre has virtually closed down as 17 shops and boutiques have shut their doors - including Carrefour, FT-Orange, C&A and other well known names. The Spanish developers are reported as having lost €150 million over this project.

The reasons for the decline include the long, unattractive road leading to the station, which has many boarded up shops; the fact that the road is one-way; poor pedestrian access via an underground walkway; and the late (by several years) of the direct TGV link to Barcelona. The planned development of a new civic centre (with law courts etc) adjacent to the station has been cancelled due to high costs.

An enquiry has just begun into what to do with the many redundant offices and hotels built above the shopping centre, including proposals to house a new School of Law (attached to the university which is south of the centre) or to transfer some administrative offices now located in the town centre.

What is surprising that this type of urban blight can hit even small villages. My own, with a resident population of just 10 000, has a huge out-of-town complex (Intermarché) which now includes many former village centre shops and services. Reasons cited again include lack of carparking in the centre and turning the main High Street into a one-way system for through traffic - which could be re-routed round the existing four-lane bypass. As a result the village centre is slowly dying like the centre of Perpignan.



 

French Property News, March 2014

In this month's edition out now I have returned to the thorny question of how to ensure that you are paying more or less the right price for your French property. As is so often said, it it is all too easy to 'fall in love with a property' particularly while visiting this beautiful country on a warm summer day, and to forget the basic questions you should ask yourself - and the owner - before deciding to buy.

In addition to the basic questions such as the general state of the property and its installations, I suggest that the would be ppurchase should check the surrounding neighbourhood and try and get a feel for the location and ask themselves Is this really where I want to live? Is there room for expansion? Are the rooms laid out the way I want them? What would happen if I wanted to downsize, sell up, move on? My article also includes a checklist of praticalities from finding out about the local taxes and charges to environmental risks such as flooding, particularly in light of the recent storms in Britain and South-west France which have left many property owners in serious difficulty.

Source www.french-property-news.com French Property News is on sale in newsagents or on subscription.

Europe's 11 million empty homes

While every country worries about the shortage of available housing, recent research shows that there are 11 million empty homes across Europe, enough to accommodate the number of homeless twice over.

Sadly it is not as simple as that, and many experts point out that properties lie empty for many reasons - searching for a buyer, put on hold until property values rise, awaiting planning permission for works, waiting to start works, unable to trace owners, costs of re-possession conversion and so on. Some local authorities (such as in Birmingham) have pioneered schemes to identify and locate empty properties  and persaude their owners to negotiate financial aid from the Council to enable the property to be renovated and offered for rental. It is often through neighbours living next to or near empty properties (which can bring down the value of other properties in the area) that such properties are located and their owners traced.

The figures are nonetheless alarming and include. United Kingdom 700 000; Ireland 14 000**; France 2.4 million; Spain 3.4 million; Portugal 735 000; Italy 2 - 2.7 million; Germany 1.8 million.

As the The Guardian* article reports, many empty homes were built in the housing boom up to 2007-8 and designed to be let. Many half-completed properties have been bulldozed to prevent the property market being even further eroded. Spanish government estimâtes talk of a further 500 000 partly built properties abandonned by constructors, a relic of the days when 800 000 new dwellings were being built every year. Some Spanish régions are taking steps to reduce the number of re-possessions by banks and/or forcing them to re-let seized properties or face heavy fines if they remain empty for more than 24 months. The Irish government is taking even more drastic measures and demolishing some 40 unoccupied housing estates.

Within France, many of these empty homes are 'located in the wrong place' for those seeking work - including the additional 2 million French holiday homes that are occupied on average for just six weeks every year either by their owners or rented to holidaymakers. In some Holiday régions, second homes can comprise up to 75% of the local housing stock.

* Rupert Neate, The Guardian, 23 February 2014. www.theguardian.com
** The figure given in the Guardian article is 400 000 but this has been challenged as incorrect. An earlier article on the Irish situation speaks of 14 000 poissibly rising to 26 000 by the end of 2014.

Disclosure by estate agents?

A recent post on a property blog* has raised the interesting question about the extent of an estate agents' duty of disclosure when offering a property for sale - how much of the bad news must he revealed to a potential buyer, particularly in the wake of the serious flooding in Britain and South western France. The question arose in response to one about the effects of the new UK 2008 consumer protection legislation on estate agents' property descriptions.

It is a question often raised in France and one that I have had to wrestle with, both during my time as a sales negotiator in a French estate agency, and more recently as a property consultant/advisor. French consumer law offer a number of built-in protections to the potential buyer and even at the stage of the pre-contract of sale (known as the 'compromis de vente') and usually running to more than 50 pages, a lot of information is written about the property.

This includes its history, its reference on the 'cadastral plan' and a copy of the expert report prepared by a specialist (paid for by the vendor) which describes the state of the electrical and plumbing installations, and the presence/absence of termites, lead, asbestos etc and an energy efficiency rating if there is a fixed heating system installed.

In addition the Notaire handling the sale will normally include information about zones liable to flooding, landslides, earthquakes etc when he does his detailed searches as to title.

It seems that the British legislation goes further than this, with an obligation to point out factors such as proximity to a motorway or a noisy factory or school, which might detract from the value of the property being sold. These are aspects that may not be pointed out by a typical French estate agent and indeed in the final sale document the buyer is warned that he/she 'purchases the property at his own risk and in the state in which he finds it'.

This puts a lot of the onus on the intending purchaser or his advisor to extend their researche into the wider location of a property, something which many buyers fail to do in the euphoria of discovering their dream home.

*Source propertynewshound.com

A home for less than €100 000?

I was delighted to come across another book by Olivier Darmon in which he has brought together in a single volume no fewer than 40 projects costing less than €100 000 (excluding land) from all over France. They all feature family homes with an average three bedrooms, a garden or outside space, and are built using the latest materials - timber, metal, glass etc - and the latest techniques for heat and sound insulation, and break the tradition of bricks and mortar.

As Darmon says in his introduction building this new type of property involves a radical change in thinking which traditionaly has regarded a dwelling as something permanent and lasting, carefully preserved and maintained, as part of the nation's heritage. New homes he - and numerous architects consulted - agree should be semi-permanent structures, capable of being expanded or changed according to the occupiers' needs over time, and even  packed up and moved to another location. Think of the many owners in Britain and France who have seen their homes seriously damaged by flooding and whose value has plummetted as a result.

At the same time, The Guardian has published an account of a new initiative by the YMCA and architect Richard Rogers to design a £30 000 flatpack house - 'suitable for housing the homeless'. It is these last words which trouble me, as they give the impression that factory built units which can be erected on site within a matter of days are only suitable for emergency situations or as a stop-gap solution to the shortage of affordable 'traditional' housing. Darmon's book proves that this is not always the case, many buyers choose to live this way, and indeed the Guardian article includes descriptions of some 'permanent' housing projects that use pre-fabricated dwellings.

There are sometimes adverse reactions from neighbours, concerned about the 'value' of their traditional homes and reluctance by local authority planning officers to approve anything that departs from their concept of the traditional house design. The good news is that home buyers are warming (literally!) to the idea of improved energy efficiency and lower costs, while architects report that planning officers are increasingly open to designs that break the traditions of permanent housing. And while France has a housing crisis, needing some half-million new homes to resolve, there may be pressure on the government to re-think their approach to non-traditional construction techniques.

For further reading:
'Maisons d'aujourhui à €100 000' Olivier Darmon, Editions Ouest-France, €24. Fully illustrated with floor plans and detailed breakdown of construction costs of each project.

www.theguardian.com Oliver Wainwright, Architecture and Design Blog, 15 February 2014 'Richard Rogers and YMCA unveil £30K homes for homeless people'.



 

Increase in 'notaire costs' in P-O (dept 66)

The Conseil Genéral of Pyrénées-Orientales (department 66) have announced an increase in the cost of registering a property that is sold - the so-called Notaire fees which are charged as a percentage of the value of the property being conveyed and are paid by they buyer.

The percentage will rise from 3.8 to 4.5 per cent of the property's sale price, adding a further €700 euros on a €100 000 property, €1 400 on a €200 000 property and so on. The changes operate from 01 March and are described as 'temporary' and are planned to last for two years. The reason given for the rise in these charges is the high cost of social benefits paid out in this region, which is one of the poorest in France with unemployment at an above-average level - currently 17 per cent.

Buyers can take certain steps to reduce (slightly) the sale price on which the percentage charge is calculated, for example by separating out any furniture and fixtures included in the sale, as well as the fees payable to the estate agent handling the transaction. These would have to be agreed with the Notaire handling the transaction. Note also that furnishing sold have to be itemises with a value attached to each individual item and not claimed using a ballpark figure covering 'furniture and furnishings' which was normally allowable some ten years ago.

 

Safety on French roads

Without wishing to sound alarmist I feel I should post a warning about the increasing numbers of attempted robberies and/or 'car-jacking' on roads in France, and those close to its borders - currently in particular the motorway from Barcelona to Le Perthus.

Some friends of mine were returning from Barcelona a few days ago when they heard a sharp,cracking sound as though their car had been hit by a rock or similar, and they were quickly overtaken by another car containing for men, signalling them to pull over as though there was some damage to their car.

Fortunately my friends had heard about incidents of this kind and continued to drive, ignoring the antics of the other vehicle, until they passed the next exit when the other car pulled off, no doubt to return later and seek another potential victim.

When they reached a service station they pulled in and parked close to the cafeteria and examined their car, which had been hit by something like a hammer or large piece of wood - it was this that had made the noise. When they told me their story, they said they had learnt from a retired British policeman in their village about these incidents and the advice he gave was

- never stop, continue driving until you reach a full service station (not a simple lay-by with no services), and park close to the shop or cafeteria where there are plenty of people.

- keep your doors and windows locked

- avoid stopping on lay-bys ('airs de repos') where you may see two or three cars parked but no services

- be particularly vigilant on motorways and main roads, cose to the border. For example, in Spain criminals will target British and French registered cars, assuming the driver is nervous about being in a foreign country and will assume it is a police check. It is not.

Incidents such as this are comparatively rare but alarming for those concerned. But try and stay calm, always be vigilant and - sadly - never trust a stranger.

Long term illness in France

If you have moved to France permanently, possibly to retire, one of your concerns may be what happens if you suffer a long term illness and what would be the conséquences of needing long term health care.

As a British retiree you should normally be entitled to a French health card, known as a Carte Vitale, which shows that you are registered with the French state health service and have been assigned a personal ID number. Once you have found and registered with a local doctor, you take the card when visiting the doctor and when purchasing prescriptions drugs or other treatments (X-ray, scan etc) prescribed by your doctor. Normally treatments and mediciens are reimbursed at the rate of 70% by the French state and you are responsible for paying the balance of 30%.

To pay for the balance you may decide to take out a top-up insurance policy, known as a 'mutuelle', for which you will pay a monthly premium. This may turn out to be expensive, and for this reason if no other, you need to know that certain long term illnesses are covered 100% by the French health system (as opposed to just 70%).

There is a published list of what are known as long term conditions ('affections long durée' or ALD) which are entitled to 100% cover , including heart conditions, liver, kidney and lung diseases - the list numbers some 30 conditions in total and is quite specific.

If you are concerned or in any doubt, you should consult your French doctor or specialist for advice, and it is he who will make an application for your illness to be classified as an 'ALD'. Each case is decided individually, the decision may be reversed or altered, and you have the right of appeal if you disagree.

For peace of mind, consult your French doctor as soon as possible. The French health service is generally efficient, fast acting and comprehensive - and you are entitled to benefit from it.

French Property News January 2014

In this month's issue I take a look at the pro's and cons of conducting your French property search  using a local French agency and the option of going it alone, whether you are buying of selling French property.

Among the advantages of using an established local French estate agency are of course their in-depth knowledge of the local market, a list of properties on their databse showing what is available and to help you compare prices, and the agent's experience and expertise in helping you select and buy the property of your choice. A lot of work has to be done by both the agent and the Notaire handling the sale, including prearing the pre- and final sales contract, ensuring the payment of a deposit and that the funds have been transfered by the buyer to the Notaire's secure account.

You may of course choose to go it alone if you feel have have sufficient knowledge of the French property market and the legal processes involved in buying and selling. Your knowledge of French should be sufficient to enable you to handle viewings by propsective purchasers or dealing with vendors, and to understand the sales documents required. Not least are your skills at negotiating when it comes to deciding the final price. The choice is yours!

French Property News is available in newsagents or on subscription; www.french-property-news.com