Government reforms do not go far enough - FNAIM

FNAIM, the French estate agents membership organisation, has recently issued a statement which is highly critical of the reforms - currently being presented to Parliament by the housing minister Cécile Duflot - declaring that they do not go far enough.

In their reply, FNAIM note that they are a voluntary membership body, representing just 12 000 out of an estimated 30 000 French estate agents. They have, they say, been pressing for years for tighter government controls and, with the means they have available, conduct their own spot checks on members. 

Although they 'police' their own members - which results in some dozen withdrawals of FNAIM membership every year - these same agencies can continue to operate, as there are no legal sanctions that FNAIM can apply.

FNAIM are also critical of the present system of qualification and training. In order to secure an agency licence (issued by the local Prefecture), an estate agent must have a minimum first degree in economics, business or law. But FNAIM claims that an estimated 5 to 7 per cent of agents are piggy-backing onto a friend's qualifications, or working as unqualified 'commercial agents' atached to any agency, either independent or on salary. The recen crisis has led to a boom in this type of casual mployment.

Most of these issues are not new and FNAIM further comments that although Duflot speaks of 'qualifications and training' nothing is spelled out in her proposals, and also that she is concentrating her attention only on the rental sector and relations between landlord and tenant, rather than tighter regulating of the profession. 

Their final word on the government proposals - 'un projet trop light'.

My advice to French property buyers or sellers is to use an agency that is a member of FNAIM (or the second body SYNAP) and has an established presence locally, in the area where you are property hunting. I would avoid using any of the 'virtual' on-line agencies who use a network local home-based 'advisors' who qualifications it may not be possible to verify. 

Understanding French documents

A member of the popular discussion forum frenchentree.com recently raised a question about the wording in a sales mandate (required when you ask an estate agency to market your property for sale) they were being asked to sign.

This was a standard FNAIM document, correctly translated into English but still unintelligible! 

In replying to the member - and advising anyone reading this blog - I would always recommend clarifying the wording of any French sales document, either with the agent concerned or the Notaire, before signing. Legal documents, even when translated into English, are not easy to understand even in your native tongue.

Although I have software that can translate the various estate agency documents into English and several European languages, I always advise an advisory session with the agent or Notaire to go through each document and explain its implications. Legal-speak is not easy to understand unless you are qualified in law, and French law is very different from other national systems.

Property prices in Pyrénées-Orientales

The weekly French magazine L'Express has just published one of its periodic surveys of the French property market and as usual it maks interesting reading. Among the highlights:

1. It seems that property sales in 2013 will be around 635 000 overall, a drop of 10.2% compared with 2012 (707 000), and well below the peak years of 2006 (820 000), 2007 (810 000) and 2011 (805 000).

2. Prices have not however dropped dramatically - averaging 3.6% in 2013. Commenting on the above figures the president of Century21 group said that, in his views, there would be no dramatic rises or falls in the future.

3. Interest rates are at their lowest ever, averaging 3.29 per cent in July 2013, after peaking at more than 5% in 2008.

These trends are borne out in Pyrénées-Orientales where I advise potential buyers and sellers, with slight rises recorded in St-Cyprien on the coast, and a surprising 12.7% drop in the cost of new-build apartments in Argelès-sur-mer. Curiously the market for individual houses built to the latest BBC norms appears to be flourishing, as buyers concerned about rising energy prices are prepared to invest in the future.

Full report in L'Express 21 August 2013.

Decline of the French seaside holiday?

As I write, we are past the half way point of the French high season, which lasts from the first week in July until the last week in August - the precise dates closely linked to the school holidays.

I currently live in a typical Mediterranean holiday resort and for those of us who have seen the seasons come and go, there are already signs that visitor numbers are down again in contrast to previous years. Before awaiting the official statistics (usually issued towards the end of the year) it is clear from simple observation that there are fewer people about. Cars that are normally full are half empty, street parking is possible where before it is difficult, restaurants already report lower numbers, and evenings seem to be getting shorter. The square in front of my window that used to be lively until midnight, when everything is obliged to close by law, is now nearly empty by 10.30 or 11.00 pm as groups make their way back to their hotels and camp sights.

A few days ago, the Daily Mail carried a piece, with depressing photographs, about the decline of many of Britain's coastal resort towns, which have become the last refuge of the elderly and those surviving on State benefits. The only surprise is that they are writing about it now, when the decline was already in progress thirty, even forty, years ago, as continental package holidays started to offer cheaper alternatives and guaranteed sun.

Here in the south of France, just a few miles north of Spain's Costa Brava, the sun can certainly be guaranteed (after a disastrous spring), but those mindful of the long heatwave that hit the area in 2003 are wary of temperatures rising above 30 degrees, accompanied by hot, sticky nights which make sleep difficult.

Like the British before them, the French have now discovered the foreign (outside France) package holiday, which can lead them to the cheaper and more exotic southern Mediterranean, Greece, Turkey and beyond, to say nothing of their Spanish neighbours over the boarder, where the crisis has hit hard. France has not so much emerged from the crisis (except in the mind of President Hollande) as pretended it is not there. True, taxes and social charges have risen, wages are frozen, unemployment is high - but pensions are still being paid, and the country's huge public sector (5 million employees) enjoys security and high pay with guaranteed special pension regimes. A lot of this money however is being spent outside France.

Can anything be done to reverse the decline? Looking at my own little resort town, the emphasis by the local Maire seems to be on providing ever more cheap attractions, whereas many people I have encountered say that the region needs to go up-market if it is to survive. Nearly all the coastal towns have a yach marina - of up to 2000 berths in some cases - and there is still a shortage of moorings. This is a sector that some argue could and should be developed, at the same time as the socialist government is talking about raising charges.

There is then the question of accommodation. My own town is booming, with several new estates of architect designed, individual houses (four bedrooms, garden, pool, double garage.......) costing 400 000 euros or more, and snapped up as soon as completed. There is considerable wealth alongside signs of real poverty. But of the total housing stock, 75% is made up of second homes which are used for only a few weeks a year, and rented out during the season (though numbers here are also in decline). They lie empty and the beach area bereft of services for 10 months of year. The contrast between summer and winter can be attractive but also unnerving.

An English friend of mind has teamed up with a younger partner experienced in the hotel industry and togeher they have taken over a rundown hotel in the centre of the village, and created a five bedroom guest house, offering full air conditioning, health food breakfasts and exceptional personal service - and they are fully booked for months to come. Demonstrating that with imagination and flair it is not necessary to cater only for the lowest common denominator.

Curiously, overall property prices have held up, as many second home owners do not want or are not obliged to sell. Those who have modernised and refreshed their apartments can still find buyers - owners of leisure boats are not without cash, and many appreciate having a pied-à-terre for themselves and their visitors. So it is an area of contrasts.

The area abounds with natural attractions, coastal paths, mountain walks, winter skiing, historic monuments, and profits from its closeness to Barcelona less than an hour away by high speed train. All the ingredients are there and it is only to be hoped that the planners and decision makers will think long and hard about preserving the best of what they have and which can be developed, and finally accept that the traditional bucket-and-spade holiday is finally out of fashion.

French property prices holding up

Despite the 'crisis' and rumours of French property prices tumbling, the latest figures from INSEE* and Notaires de France and based on actual transactions completed, confirm that prics remained stable in the first quarter of the year overall.

There are slight regional variations but the average reduction recorded has been under 2%. Sales of second homes, popular with non-French buyers, represented just 7% of the overall property market or around 45 000 sales. Note that in Mediterranean coastal and other major holiday areas up to 75% of the local housing stock can be represented by second homes.

As another 'stimulus to boost the property market' President Hollande has announced a special one-off reduction of 25% on capital gains tax charged on second homes for the 12 months from 01 September 2013 to 31 August 2014. The timescale assumes a smooth passage of leglislation through the French parliament.

* the French national research organisation.

Selling privately? Precautions you should take.

One of the hazards of putting your French property on the market privately is that you thereby invite anyone and everyone to come and view your home. Here are a few precautions you should take.

- Do not trust anyone simply because they say they are interested in buying your home. It is well know that con-men and worse use private For Sale signs and adverts as a means of gaining entry into the homes of vulnerable people.

- If you advertise in the press or on line, and receive phone enquiries and requests to visit, gather as much information as you can about the would-be purchase - full name, address, phone number (preferably a landline not a mobile) when making an appointment to visit. 

- Never receive visitors alone, have your spouse present, a relation, neighbour, friend with you.At the very least alert a friend or neighbour close by, saying you will call them immediately after the visit. Immediate neighbours can also be your eyes and ears - for example, noting down a car registration number.

- If you have a For Sale sign outside your house, be particularly careful with unannounced visitors. If you are alone and in any doubt, do not answer the door or say you are expecting a visitor by appointment and the ask the caller(s) to come back later by appointment. At this point, take their details as noted above and if possible their car registration. You can then arrange a visit when someone else is with you.

- Do not be afraid to ask for the above information. Potential buyers who visit estate agents will hav their identiy and other details checked (including their ability to pay!) by the negotiator , and visits will be logged on the computer. These are essential precautions used particularly when negotiators accompany visitors to a remote or empty property. They are also used to fill-in the 'bon de visite' which the visitor signs as proof of being shown the property by the agent. (Many properties are advertised with more than one agent so this is an essential procedure to avoid later disputes).

NOTE: I recently posted the above information on the FrenchEntree forum following a press report of a young woman reported missing after advertising her property for sale and receiving a visitor. At the time of writing there is no further news of her wherabouts. The post was universally applauded by members of the FrenchEntree forum as sound advice.

The time to sell is NOW?

Right now could be the best time to put your property on the market, if you are trying to sell your main or principal home - that is, not subject to capital gains tax, as in the case of a second or holiday home in France.

Last night, unveiling yet another plan to 'stimulate the property market', French president Franois Hollande announce that there will be a special reduction in the capital gains tax levied on sales of second homes, but only for the year 2014. Why wait, you may well ask, in addition to his proposed changes (this autumn?) on the length of time you have to own a second home before you can sell it without a CGT charge - recently increased to 30 years, formerly 15 and to be settled by Hollande at 22...later this year.

There is good news in all this for owners of principal homes (main residence in France) who are anxious to sell now, perhaps to down-size or even return to the UK. The Hollande announcement is bound to encourage second-home owners to withdraw their properties from the market, until 2014, in anticipation of a better CGT deal. While any gaps in the market can be filled by principal-home owners not subject to CGT on sale.

It is rare that one can truthlly assert that now is a good time to sell, but I think this may be the exception.