French ‘off plan’ leaseback property – an investment protected from currency fluctuations

In these economically troubled times, many potential investors are put off by poor exchange rates between the pound and the Euro, preferring instead to err on the side of caution. While this course of action is wholly understandable, they do risk missing out on some great opportunities.

Sextant Properties is currently marketing a leaseback development for sale in the French Alps with a yield up to 4.5% (ref 19547). Having appeared on the market on the 21st September 2009, the development is attracting an overwhelming amount of interest. – as of the 12th November, 47 of the 77 apartments have been sold, and 5 others are reserved.

The 25 remaining properties still offer plenty of choice. It is unlikely that any of the properties will still be available in January. Here is why you can buy today without being affected by the unfavourable exchange rate:

The properties are ‘off plan’, which means that the buyer pays little now. Additionally, taking out a French mortgage will result in monthly payments which are the best way of responding to currency fluctuations.

If you buy apartment number C001 on the market at €175,800 (including VAT) you will need to pay only €154,764 because the VAT will be reimbursed. You can take a 100% mortgage on the price excluding VAT (€154,764) and the property can thus be financed in the following way:

> Due now 5% Reservation deposit: €8,401
> On signature of the mortgage offer, brokers fees €774 to be paid in December 2009
> Just before signature with Notaire, Bank fee €1548 (to be paid in March 2010)
> After signature with the Notaire refund of extra deposit €2,248

For the next 24 months you pay life insurance payments of around €41 per month (subject to approval). The delivery is scheduled in November 2011. You will then start to receive a rental income every three months from La Grange, and this will be used to pay back the mortgage.

Our specialist broker, Athena Mortgages, gave us a quote for this particular property, as follows:

The start date for repayments will be in March 2012. The buyer will need to pay €286 per month from that date. The rental income will be increased every 3 years, and, for this reason, the shortfall will decrease with time.

In summary, the purchase of an ‘off plan’ property worth €175,800 would only require an initial payment of €10,723, which would be paid in several instalments. Industry experts predict that the exchange rate will have improved significantly by March 2012, making the reality of investing in French property far more accessible than most people think.

If you do not want to miss this unique opportunity, contact us on 020 7428 4910 or visit the reference 19547 for more details

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Notaire fees and your new property in France

Buying property anywhere is a complex and rather bureaucratic exercise – each country has its own unique collection of quirky customs and obscure conventions that must be followed to the letter, often, it would seem, with the sole purpose of mystifying foreigners. The French property market is more idiosyncratic than most, and, for a Brit unused to the legal conventions involved when purchasing property in France, nothing illustrates this as well as notaire’s fees. ‘Frais de notaire’ are an obligatory feature of any house purchase, and it is important to take them into consideration when deciding how much you can afford to spend on your new home – they are almost never included in asking price featured in property adverts. However, although the fee structure operated by French notaires can seem fairly mysterious and tricky to fully comprehend, it is easy enough to understand in principle. And, of course, as with all legal conventions, if there is anything you are struggling to understand over the course of your purchase, just ask!

A notaire is essentially a cross between a solicitor and a town clerk. They play an extremely important role throughout the purchasing process, acting as an advisor and making sure that you are aware of all the formalities that need to be completed. It is their job to ensure due dilligence – basically, they exist to oversee the paperwork generated by a property purchase, and to ensure that all proceedings are in accordance with French law. As well as acting in property conveyancing, they also have a role to play in inheritance procedures, marriage contracts, wills, divorce settlements and the letting of property.

Notaire fees, or ‘frais de notaire’, are in part, as the name suggests, fees paid to the notaire in return for their services – they are not employed by the French government, so the notaire earns his or her income directly from the fees charged for their services. However, the notaire is not the sole beneficiary. The majority is made up of fees due to the Treasury, which the notaire is responsible for collecting, and professional fees owed to the land and building surveyors, among others. As a general rule, for a purchase without a mortgage, the percentage of notaire’s fees that go to the notaire tend to be around 1%, although a scale system is in operation – the higher the sale price of the property, the smaller the cut taken by the notaire. For example, for a purchase between €17k and €30k, around 1.1% of the ‘frais de notaire’ goes directly to the notaire, while for a purchase above €30k, the notaire will only take around 0.825%.

The rates for notaire fees are fixed by the French government and are determined in relation to the sale price of the property, and, as previously mentioned, can be rather confusing. While the percentage of the fee going to the notaire does not change whether the house in question is a new build, leaseback or an older property, the age of the property is used to calculate the total fees due. Broadly speaking, they are usually between 2 and 3% for an Off Plan or ‘new build’ property – that is to say, one that is less than five years old.

Here is a good calculator which will give you an estimation of the Notaire fee you need to pay: Calculator

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Start the après-ski early on the ski train to the French Alps

As the leaves continue to fall and the days become ever shorter and increasingly cold and miserable, the average person naturally begins to entertain thoughts of escaping the damp gloom of the UK. Ski resorts have a sort of inherent glamour – names like Chamonix, Val d’Isere and Courchevel instantly evoke images of roaring fires, of glittering expanses of snowy slopes, and of attractive people with rosy noses and gleaming white teeth laughing gaily as they tuck into vats of fondue. Even resolute non-skiers born utterly devoid of any sense of balance are not immune to daydreams of alpine frolics, finding themselves being seduced by the idea of après-ski antics and melted cheese. Unfortunately, in reality, skiing holidays invariably entail a considerable amount more hassle than they do in escapist daydreams; getting there involves either driving for hours along winding mountain roads, or grappling with bulky ski-wear in a vain attempt to make it all comply with airline baggage restrictions. Unless you possess the driving skills of Clarkson and a tardis-like suitcase, or resort to wearing your salopettes and snowboard boots on the flight, getting there can be a rather stressful experience. There is now, however, a third option – one which will allow you to travel down to your chosen resort in comfort and style, with minimal fuss.

The Eurostar is arguably one of the best inventions of the 20th century – it is without a doubt the best and easiest way to hop between London and Paris. It is sleek. It is comfortable. It is fast. It is entirely carbon neutral. It is very, very stylish. And, from the 19th December 2009 and the 17th April 2010, it can whisk you from St. Pancras International or Ashford International to the ski resorts of Moutiers, Aime-la-Plagne and Bourg-St-Maurice at a seriously speedy 186 miles per hour. If booked early enough, prices are competitive – a Standard class return journey begins at £149, while a Leisure Select ticket, including meals, drinks and extra comfortable seating, starts at £229 return. One of the many advantages of using the Eurostar Snow Train service is that it deposits you on the doorstep of your resort – it is merely a case of hopping on the train in London or Kent, settling back to enjoy the stunning scenery, then hopping off the train at the other end, ready and raring to hit the slopes. Either opt for the day train, which departs from St. Pancras at 10am and arrives at its last stop in Bourg-St. Maurice in time for dinner around 8 hours later, or the overnight train which leaves at 8.30pm and arrives at 6.30am, allowing you time to grab breakfast before hitting the slopes. It is worth taking into consideration the fact that if you decide to travel on the night train in both directions, it will allow you to spend eight days on the slopes rather than the usual six. Those travelling with children needn’t worry about sharing the train with crowds of drunken revellers, either – Eurostar will be imposing limitations on the amount of alcohol passengers can bring onto the train with them, so a restful journey is assured. Snow Train passengers also benefit from an increased luggage allowance, allowing you to pack clothing and equipment for the whole family without resorting to wearing it.

For avid skiers looking to invest in the French property market, there is plenty of affordable accommodation in the most popular Alpine resorts, conveniently located for the Snow Train service. Fully furnished leaseback apartments in a new 4 star development in Les Arcs cost between €222k and €428k, have between one and three bedrooms, and come with access to a superb leisure complex including a swimming pool, sauna, hammam, jacuzzi and fitness room. The complex is a stone’s throw away from the station in Bourg-St. Maurice, the last stop for the Eurostar Snow Train, making it unbelieveably easy to travel from the UK in comfort without having to haul mountains of ski equipment between the airport and your resort. As all the leaseback apartments come with a guaranteed return on your investment of between 3.8% and 2.5%, dreams of a cosy apartment in a winter wonderland have the potential to become a reality.

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