Monday, March 30, 2015

French local elections - 50% fail to vote

France has just gone through the second round of regional elections and the only surprise after the defeat of the socialists and rise of the (far) right is the extremely low turnout among the electorate. There are a number of reasons for this, in my view including the following;

- Feelings of political/election fatigue, with too frequent elections (European, national, regional, local....) resulting in some sort of election every year
- People are weary of non-stop television coverage, political analysis, opinion polls and predictions, and both major parties already campaigning now for the next presidential elections
- No clear statements of policies and solutions for France's 'problems', with politicians more ready to attack each other than offer a credible alternative
- No local contact between politicans and their constituencies - few know who is their MEP and in the latest elections few recognised the bulk of candidates
- Too many tiers of government - local, regional etc - and few understand the various divisions of power - regional, departmental, local etc
- Other than knowing who is their local Mayor people do not know their elected representatives
- At the very lowest elevel, too many 'mairies' - in my home town of Perpignan (120 000 pop;) there is a 'mairie' for my district about 200 yards from the town 'mairie' which is virtually next door to the departmental HQ.....
- Each outlying village, many of which are virtually suburbs of the nearby, has its own 'mairie'....

This list is not exhaustive!

Friday, March 27, 2015

Paris offices become luxury/mixed apartments

Like many other European cities, Paris is suffering from a surplus of office space, much of it created to fulfill a demand which has since reduced. A spectacular example is the 15 storey block formerly occupied by scientific laboratoriesand offices in Courbvoie on the outskirts of Paris and close to La Défense.

The huge complex has been converted into 182 apartments (some selling at an average 8000 euros per square metre), 46 studios designed as lower cost student accommodation, and 99 units designed for short-term letting and professional use. The complex also includes a supermarket and car parking, and services such as a concierge, fitness centre and 'guest rooms' that enable owners to accommodate short stay visitors such as family and friends.

The Paris/Ile de France area is estimated to have some 4 million square metres of empty office space and the Mairie de Paris is planning to convert some 200 000 square metres into housing, during the next six years. 

Tuesday, March 24, 2015

France's mad, chaotic social security regimes

Unless you have tried to make a living in France, you may not be familiar with the utterly chaotic and inefficient tax and social security regimes - and the consequences on (un)employment.

It would tale a sizeable book to explain but very briefly if you work in France, either employed or self-employed, your social contributions are collected by one of several semi-independent bodies, and depend under which 'regime' you are working. For example as an employee, a farmer, a liberal profession and so on. If you work at more than one job - for example, you are an employed school teacher but during those long weeks on holiday, you also run an art gallery - you will pay security contributions into at least two schemes, one for each activity. Heaven help you if you have muultiple occupations, as many people do in Britain, or in the above example also create and sell your own artworks (another regime!)

When I lived in Britain before coming to France, I worked simultaneously as a part-time university lecturer, a writer and journalist, a legal consultant and as an advocate in the employment tribunal. In France this would involve five or possibly six separate social security 'regimes' (as authors are separate from journalists!). As I earned more I paid proportionately higher tax and social security charges, with contributions all going into one pot, regardless of their source. This situation will of course be familiar to many others who have multiple-sources earnings.

Not surprisingly the Anglo-Saxon approaches, proposed two or three secades ago by authors such as Charles Handy, have not reached France. It was Handy and others who predicted a future of 'mixed employments' for many, involving periods of full or part-time working, job sharing, self-employment, mixed employment, unemployment, and this is a reality for many in Britain and the USA.

French economists such as Emmanuel Macron, author of a 200-point plan to revive the French economy, appear not to have glanced across the Channel, and whatever reforms the socialist government*  proposes are rendered ineffectual because no-one has had the courage and foresight to radically to tackle the current system of separate social security regimes.

As I wrote in an earlier post among the worst scandales associated with the different social security regimes are the long delays in making payments: twelve months or more since becoming retired, several thousand French people are still awaiting their first pension payments while their social security providers try to work out the correct level, based on a lifetime of contributions.

* It should be noted that none of the other major French political parties has come up with a better plan. 

Monday, March 23, 2015

Decline of the out-of-town shopping centre?

They say that a trend which starts in America will eventually follow in Europe. And so it  was with out-of-town shopping centres - known as malls in America - and their current decline. The statistics for mall closures in America are still sketchy but most agree that while the percentage has not yet reached double figures, the trend is clear and accelerating. Worst hit are the oldest, the largest and those furthest from the nearest town.

Among the reasons for this decline are the growth of online shopping, particularly where the famous brands found within the malls, have themselves entered the online sector. Why drive when you can shop at home? The scarcity and consequent high costs of building land are also cited, along with climate change where heavy snow can make access difficult for several weeks of the year. Many people are also turning their back on the car and among cities voted as among the best places to live are those where it is possible to move around on foot or by bicycle - to work, to shop, to enjoy ones leisure.

France is still at the expansion stage but there are already signs that this may be slowing down or halting, partly due to recession, but also for the reasons noted above. France has been Europe's largest creator of 'centres commeriaux' which are a feature of most suburbs - and the statistics are impressive:

- estimated number of shopping centre is 750, featuring over 33 thousand indiviual shops
- the amount of land occupied has been estimated at 17 million square metres
- total annual visits by shoppers over 3.2 billion
- annual turnover estimated at 118 billion euros
- 420 000 people are employed (25% of the total retail sector) with an estimated 15 000 new jobs each year
- it takes from 5 to 7 years before a commercial centre becomes viable (before it was morely to be 3 to 5 years)

Among the reasons cited for their success are the appeal of one-stop shopping, based around a flagship brand (such as a well known hypermarket) and a concentration of all the best-known retail chains. Easy access and parking are also appreciated by users.

For the retailers the attractions include potentially lower rents compared with the town centre and being alongside their well known neighbours.

Factors which may (as in America) lead to their decline include online shopping, traffic congestion, lack of public transport for non-car drivers (bearing in mind Europe's aging population) and the overwhelming size of some centres and individual hypermarkets.

There are also concerns about the corresponding decline in town centres which are seen as dying through lack of convenient shops and services. City councils  are reacting by lowering rates and taxes, improving public transport and parking, and creating more pedestrian areas. Some retailers have reacted by opening smaller in-town outlets, including Monoprix and Carrefour.

A final heartening trend from America is the recyling of some out-of-town malls, including schools, universities,  hospitals and medical centres, and sports and leisure complexes.

Friday, March 20, 2015

French property searching: the 'bon de visite'

Quite often the question arises about the 'bon de visite' - it's role and validity in the French property searching and buying process. Here I try to explain briefly.

When an owner decides to put his/her property up for sale, he has a number of options -  to try and sell it privately, or to place the property with one or more state agents; or to use a combination of the above.

If you decide to use an estate agency, as owner you will agree a 'mandat de vente' under which the agent agrees to market and try and sell your property, against an agreed commission, based on a percentage of the sale price. If you use only one agent you can sign a 'mandat exclusif' under which the agent has the sole right to market your property, and even if you attract a buyer yourself, you normally expect to pay the agent a commission - or at least an agreed portion of it.

If you want to use use more than one agency, you can sign a number of 'mandats simples' - and indeed include in the contract the right to try and market yourself. This alternative can give rise to confusion and even disputes where it is unclear which agent 'first introduced' the client to the property and is therefore entiled to his/her commission in the event of a sale. Hence the 'bon de visite'.

When a potential buyer buyer walks into an estate agency to help find a suitable property and is eventually taken on a number of visits, he/she will sign a 'bon de visite'. This is a simple document which includes and name and other details of the potential buyer,  and most importantly a list identifying the properties visited with the agent. In the event of a dispute over commission or who first introduced a buyer to a property, the 'bon de visite' becomes part of the evidence.

Note throughout all this, that it is the owner/vendor who is bound by the terms of the mandate which he/she signed with one or more agents, and not the buyer. A vendor who is in breach his agreement with the agency, for example by not paying the agency's commission when the agency has fairly secured a sale, can be subject to prosecution through the courts and subject to costs and damages.Note finally that a vendor who has signed one or more 'mandats simples' will find that among their conditions is the obligation to notify the agency of a buyer either introduced by another agency or privately. 

Wednesday, March 18, 2015

Estimating the value of a French property

If you are thinking of buying or selling a French property, you may be interested in a short article in this morning's LeFigaro which summarises the pirnciple factors that can affect the value of a property, for better or worse. Here I summarise the main points and (French) terms used.

- 'Surface' - More square metres normally cost more money! Square metres are calculated where the ceiling height is 1.80 metres or more. Mezzanines are not counted as officially  habitable space even when 1.8 metres or more in height. The 'loi Carrez' governs the sale/purchase of apartments and in all cases if the measurement of the area proves to be 5% inaccurate or more (over-estimated) a buyer may claim compensation.

'Terrain' - A tiny patch of grass or space enough to include a pool, a tennis court etc.

'Implantation' - Refers to where the property is located - urban, suburban, rural; close to local services or not; undesirtable elements such as a main road, factory entrance, noisy bar etc nearby

'Agencements des pièces' - Refers to the interior layout of the property, particularly bathroom/WC(s), wasted space (corridors, landings), inter-communicating bedrooms etc.

'Aspecte' - Which way does the property face in relation to natural light, the sun, a nice view etc

'Date de construction' - What were the applicables norms at the time compared to present day?

State of the interior 'décoration' and 'equipements' (such as kitchens etc, gas, electrics, plumbing) - and much will it cost to put right?

'Dépendances' - Presence or absence of outbuildings such as garage etc.

'Servitudes' - restrictions such as a right of way across the property

'Etat du marché - State of the local property market

To the above list I would add, in the case of an apartment or villa, within a co-ownership property ('copropriété') the level of monthly management and service charges, which can be high where there are shared extras such as a concierge, parking a pool, extensive gardens etc.

The article adds that while estate agents may offer a free 'estimation' they may pitch the price too high (to raise the owner's expectations and secure a mandate to sell) or too low (in the hope of a quick sale). An independent professional valuation will cost between 200 and 700 euros.

Source. 18 March 2015 

Saturday, March 14, 2015

Smoke alarms

A recent French law has decreed that all domestic properties should be equipped with smoke detectors (alarms) by March 2015, which have been a feature of UK homes for probably 20 or 30 years.

Unfortunately, like so much well intentioned planning, this one seems to have gone terribly wrong.
France has some 30 million households, ranging from large houses to studio apartments, and according to the comprehensive guidelines published some will need several alarms strategically placed in order to be effective - hallways, living rooms, bedrooms etc. Let's say, as a very conservative estimate, 100 million alarms needed in a comparatively short space of time - a manufacturing/marketing opportunity handed to suppliers on a plate by the French government, a huge captive market........

But where are they, now that the deadline for installation has been reached? My own tour of  localsupermarkets, electrical shops, 'brico depots' - and the assistance of friends in my search - has not turned up a single smoke alarm in stock, with salesmen saying they don't know when or if they will be receiving any. As a last resort I finally tracked down one on for delivery next week!

This is the reality of the French 'market economy' - and surprisingly no-one seems to have commented!

Tuesday, March 10, 2015

Renovating an older property in France

The French have a passion for buying newly-built properties. They are often cheaper than renovating an older property, are constructed (normally) where there is a demand and basic services are provided, close to work - and most recently, constructed in accordance with the latest BBC normes (designed for low energy consumption). This means two things - if you have an older property you wish to sell, you may have to make some improvements before you can find a buyer; and if you are moving to France to live/retire, you are among the many thousands wanting to find and older property and spend time doing it up. Here I suggest just two valuable ressources which offer valuable guidance.

First, the French TV programme 'Maison à Vendre' presented by an experienced estate agent Stéphane Plaza (Wednesday evenings from 20.55, repeated Sunday afternoons from 13.00 on channel M-6). In the programme Plaza and his team help vendors prepare an older property for sale, that has usually been on the market for several months and has attracted few or no potential buyers. Invariably the decor is from another age and the owners are often retirees wanting to escape south to the sun. Many are over-priced and Plaza is on hand to point out why, taking the owners to visit similar sized properties that have sold, and explaining the reason why. The transformations that he and his team achieve, with the cooperation of the owners, are somewhere between home-staging and a full renovation, and spectacular results are achieved at a cost of between 2 - 4 per cent of the selling price, split between materials and labour costs, and items purchased.  And in virtually every case, the property is sold......

The second ressource is a book in the 'Archi Pas Chere' and called 'Bâtiments modestes réinventés' by Olivier Darmon. Don't worry if your French is not perfect as each of the fifteen case studies  is illustrated with before and after pictures, floor plans and - most important- a breakdown of the actual costs of the work undertaken, showing the cost of each operation (plumbing, heating, electrics, decoration etc). The works have generally been done by French artisans which will give you an idea of how much they cost, under the guidance of an architect.

'Bâtiments modestes réinventés' by Olivier Darmon, Editions Ouest-France, 142 pp, 2012, price €15.90 ISBN 978-2-7373-5238-6 

Renting versus buying in France

Out of 27 million 'principal residences' (excluding holiday homes) some 60% of French are owners of their home, consisting of some 15.5 million households. Of these 80% live in individual houses and the remainder in apartments. Some householders elect to rent out of choice, perhaps also owning a secondary home, while others have fewer options - including the young, those on low salaries, the old - who are obliged to rent within the private sector (nearly 60%) and the remainder in social housing, much of it built in the period after the war when huge estates - known as cités - started to appear on the outskirts of many French cities and towns.  Many of these are now considered 'problem areas' (see post below) and have created wide social divisions between rich and poor.

Those moving to France from abroad tend to be property buyers, unless their stay is intended to be short for professional reasons, such as a temporary work assignment or to complete a course of studies at advanced level. Some potential buyers may choose to rent for a short period - say one year - while they look around one or more areas before deciding where to settle and this category can include many (older) people seeking a retirement home in the sun.

Rentals are offered either on a short term basis - up to 12 months and invariably furnished, with the possibility to negotiate an extension. Houses or apartments in this category tend to be more expensive to rent than longer term unfurnished properties. An unfurnished private rental is normally for a minimum of three years, with considerable security enjoyed by the tenant, particularly if it is his/her principal home. Even defaulting on rental payments or causing nuisance or damage cannot automatically lead to a tenant's eviction - legal cases can take years to reach the courts, while there is a 'period of grace' during the winter months with yet more protections for those in old age, all of which can make eviction difficult. Potential landlords should be aware of these potential problems, mindful of corse that the vast majority of tenants behave correctly.

As in Britain and elsewhere, the French government bemoans the lack of social housing and there are long waiting lists for properties at controlled rents (known as HLM). And as noted in the posts below, government subsidies (through tax relief) to provide lower cost rental homes have generally failed.

Monday, March 9, 2015

Social housing and creating ghettoes......

French socialist prime minister Manuel Valls has called for the creation of more 'social housing' in wealthy areas of cities such as Paris, but critics argue that the plan would only create more 'ghettoes' and further encourage the separation of rich and poor. As one centre right mayor put it "You cannot simply force people to live together and hope to create a community".

Following the events of January 2014, Valls has spoken of 'social apartheid' while many argue that creating social housing is counter-productive as it results in huge segregated estates in parts of cities where no-one wants to live (see my earlier post above about Carcassonne) and in reality causes the divisions about which Valls is complaining.

According to a law dating back to 1980, French mayors are obliged to provide social housing as a proportion of all new dwellings but many fail to reach their target due to the high cost of building land and construction. Meanwhile as shown in the case of Carcassonne many subsidised apartments (14% of the housing stock) lie empty for want of tenants.

Thursday, March 5, 2015

Research - before you buy!

An interesting and enlightening report in my local newspaper L'Idependant this morning. It concerns the city of Carcassonne - 44 000 pop., head of the Aude department, a historical walled city popular with visitors, but there is a property crisis.

Apparently there are 4 000 empty apartments seeking tenants and representing some 14% of the housing stock. Unfortunately they are the products of numerous buy-to-let government subsidised investment schemes dating from 2000 onwards and designed to promote the construction of low-cost apartments. Unfortunately, as in many areas of France, the Carcassonne apartments were built on cheap former agricultural land, remote from public transport and other services, and in places no-one wanted to live because of the absence of jobs.

My own researches show that in over 50% of cases 'investors' failed even to visit the area where promoters encouraged them to sink their money, and few if any actually investigated the market potential for low cost rentals, by talking to local estate agents etc. As a result many are now the owners of a property they can barely afford to pay for, that is impossible to let and near impossible to sell, for all the above reasons. In the Carcassonne case, the town hall is talking of taxing owners to force them to rent their properties......

What these examples show is that it is absolutely essential to conduct your own researches on the ground, particularly if you are thinking of buying any kind of property from which you hope to make money - a café/restaurant, bar, rental apartment, shop, B&B etc. Never, ever rely entirely on the brochure!