With doubts regarding the economic growth, the European Central Bank (ECB) should not modify its key interest rate, at the record low level of 1%, before the next year. By consequence, Interest rates in September remain unchanged compared to July 2010. They are still lower compared to January 2010 with the Euribor 3 months rate at 0.888% so it is the still a good time to take on a fixed rate, at their lowest value ever.
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French interest rates and how they work
Most of the French Mortgage lenders index their rates to the Euro Interbank Offered Rate, or Euribor, the average interest rate at which term deposits are offered between prime banks in the EU wholesale money market or interbank market. Just like the LIBOR serves as a short-term reference rate for British Pound and U.S. Dollar, the Euribor is widely used as a reference rate for Euro.
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The French banks usually index their rates to Euribor 3 months currently at 0.888%. Each bank applies a margin of between 1.30% to 2.50% depending on the lender and the product’s features.
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Variable products are usually redemption penalty free, although some banks may charge penalties in case of a re-mortgage. Fixed products are currently very low and very popular, but capped products starting at 3.50% and capped at 4.50% are also recommended in the current climate.
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Best French Mortgage products currently on the market.

1. Interest only mortgages with variable rates starting from 3.15%
2. Rates starting from 2.20% for equity release and re-mortgage
3. Rates fixed for the entire term starting from 3.15%*
4. Some French products are capped at 1% above the initial rate, to give you more security
5. 100% LTV French mortgages with capped rates starting from 3.50%**
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* Over a short term of 6 years on a repayment basis, for a loan of or above €230,000

** You would only be expected to pay the Notaire fees and the estate agent’s fees. Available only for properties of over €300,000

*** Higher rates may be applicable for longer terms and different loan amounts

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For more details regarding French mortgages, you can have a look at our website dedicated to French mortgages: http://www.sextantmortgages.com
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If you would like to receive a free quote with no obligation, contact our in-house mortgage consultants by telephone: 0207 428 4918 or by email: mortgages@sextantproperties.com
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With 15 million tourists each year, the Languedoc-Roussillon is a beautiful region in the south of France. A few years ago, only the Cote d’Azur was prized by buyers and tourists. However, this trend is changing and moving to the Languedoc area, which is well appreciated by workers and retired people. Situated between Spain and Provence, the Languedoc Roussillon is split in five departments: Aude, Gard, Herault, Lozere and Pyrenees Orientales.  With 300 Sunny days a year, the Languedoc Roussillon area is now one of the most popular areas of France as it is the fourth touristic destination of the country.
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Here are some numbers regarding the Languedoc Roussillon area:
•    1st French area for open-air hotels.
•    2nd French area for holiday homes in residence.
•    4th Touristic French area, after Provence Cote d’Azur, Rhones-Alps and Ile de France.
•    15 million tourists each year.
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Integrated in a project linking Spain, France and Italy, the Languedoc Roussillon has developed the Mediterranean South Europe LGV (high speed railway) project. Due in 2015-2020, this great achievement will definitely revitalize the area. Languedoc Roussillon is also well served in terms of airports as there are five main commercial airports- in Beziers, Carcassonne, Montpellier, Nimes and Perpignan. At the end of the building of the Mediterranean South Europe LGV, Paris will be easily linked to Madrid via Barcelona.  Consequently, this large European axis will be a huge benefit for the whole continent. Montpellier will be only 3 hours away from Paris. (Currently Marseille is also 3 hours away from Paris). But one of the major objectives of this project is a strong development of rail freight in order to decongest the French motorway network, mainly along the Rhone Valley.  Moreover, the travel times between French and Spanish cities will be reduced by half.  The future TGV will serve eight cities in Catalonia and the south of France: Barcelone, Béziers, Figueras, Gérone, Montpellier, Narbonne, Perpignan, and Toulouse. Thus the lettings market, which is already quite important, will be consistent in the coming years.
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Attractive for touristic activities, the area is also important in term of employment. The Languedoc Roussillon is the second French region for growth in employment. Various sectors are represented in the area like construction, trade or personal services and multinationals choosing to set up their offices like IBM, Dell or Sanofi-Aventis. Regarding agriculture, the sector has always been rewarding as it is ranked as the first in France and boasts the largest vineyard area in the world with well known rosés such as Cotes du Roussillon, Corbieres or Saint Chinian. The area is also well known for the quality of its cuisine. Traditional dishes are based on olive oil, honey, cheeses and wines. The Mediterranean-influenced cuisine includes brandade de morue, encornets farcis and cassoulet.
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The Languedoc Roussillon area benefits from numerous tourist attractions thanks to its important cultural and historical heritage. The evolution of the Languedoc Roussillon’s coastline is linked to the renovation of the area. In the sixties, the French government created major regional development projects involving tourism and equipments. Legislations have been introduced to assist in the respect of the coastline and the mountain.  The coastline offers amazing resorts with beautiful sandy beaches and marinas in Port-Camargue, La Grande Motte, Gruissan, Saint Cyprien or Port Barcares, all rewarded by the Blue Flag  the award given to beaches and marinas regarding the environment (“pavillon Bleu”). Some of them offer traditional fishing ports like in Sete or Collioure where it is possible to buy fish and shellfish directly when the boats came back from fishing in the morning. Also, with 30,000 mooring rings and 27 marinas, the Languedoc Roussillon opens on the Mediterranean Sea, Europe and Africa.

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Thus, if you are looking for an investment in an area of France, Languedoc Roussillon is the new favourite FRENCH region. Linked to all the major developments, new real estate projects are constantly arising. Just 10 km away from Montpellier, Juvignac is ideally located between Nimes and Beziers. Here Sextant New Build proposes the Domaine de la Valadiere (1) set in 445 acres of green surroundings, on the edge of the 18-hole international golf de Fontcaude offering furnished two bedroom apartments with gardens or terraces. Following the Languedoc coastline, Pezenas is a small and pretty medieval town where you can find a great leaseback opportunity with Les Templiers (2) resort consisting of luxury apartments from studio to two bedroom apartments with Mediterranean gardens, spa and swimming pool.
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With views on the Languedoc Corbieres Mountains, the Saint Benoit Gardens residence (3) draws its inspiration from the nearby Saint Laurent de la Cabrerisse picturesque village and consists of luminous one bedroom houses with private Mediterranean gardens. Situated in a picturesque village along the Canal du Midi and restored with taste and quality, the Chateau de la Redorte (4) is a luxury complex offering studio to three bedroom apartments. The centrepiece of this unique project is the fully restored Chateau presenting classic French elegance with a modern twist with   an outdoor pool and a magnificent spa with an indoor Roman bath.
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The Perpignan area is a beautiful cultural mix between France and Spain. This southern area of the Languedoc Roussillon has beautiful seaside towns such as Argeles sur Mer, a traditional small village. A beautiful residence allows you to make a great investmentt with the leaseback of Les Demeures de la Massane (5), a new residence offering apartments and villas. Pure Mediterranean in style, its architecture is a harmonious blend of wood, light coloured stone and ochre shades.
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So if one of these Languedoc investment properties interests you, don’t hesitate to contact one of our consultants and visit the Sextant New Build Website.
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Our weekend started early, on Thursday in fact, with a morning flight from London to the compact airport in Beziers. We left the English capital under rain and arrived, as we had so fervently hoped, under a haze of glorious sunshine. There was no time to enjoy it yet though, as we had a busy schedule ahead of us.
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Our first stop was to the site of the future tourist residence in Juvignac- set in 445 acres of land it will offer furnished apartments and a swimming pool, close to Fontcaude golf course (ref 30871). Speaking of golf, we moved on to the leaseback development Domaine du Golf Fabregues (ref 14161), where we stayed the night. The residence offers a range of facilities, including of course the golf course (excellent for a novice like me as it is only 6 holes) and a pool, but it also includes a spa and a restaurant, perfect for a relaxing mini-break. Before our evening meal we met a new partner of Sextant’s, who showed us the location of a new leaseback project near Beziers.
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Our stomachs rumbling, we proceeded into Beziers itself in search of our evening meal. Strolling along the beach we found the answer to our prayers- a paillotte, or beach hut. These delightful structures pop up over the summer and serve the freshest seafood around, then like some fragile flower, they vanish for the winter only to reappear again the following year. I feasted on fresh prawns and bourride, the popular fish stew with chilli and garlic mayonnaise. Rosé was on tap to wash it all down, as the sun set, framing the local fairground in the background, a sort of Mediterranean Coney Island.
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Friday was another sunny day. We decided to breakfast in Montpellier, the capital of the Languedoc-Roussillon. It is a vibrant city with a beautiful old town, bursting with history. The architecture especially is interesting, and a real mix, including an 18^th century water tower, an aqueduct, the medieval Ancient Courrier and a host of delightful narrow streets. It’s also mainly pedestrian, making strolling along even more pleasant. Bakeries and cafes are a dime a dozen here, with enticing smells of freshly ground coffee and croissants wafting through the air. In the afternoon, we drove to a superb development near Carcassonne, a magnificent vineyard and spa estate (ref 24659). The collection of intimate houses, stylishly decorated and furnished to the highest standards really compliments the use of local materials (flagstones, wrought iron and stone). The reception house in particular took our breath away, with its beautiful Spa, Hammam and pool, the chic bar and restaurant and panoramic views from the terraces. Carrying on with the luxury feel, we headed to the La Redorte chateau (ref 26624), currently languishing in faded grandeur but soon to be rehabilitated into a stunning development of apartments and villas. Recalling its glorious wine producing past, the red liquid will flow once again, with 12 bottles of wine a year to be offered to each owner! We even visited the secret tunnel where the process will begin anew. Following this visit we felt a little parched ourselves and decided we wanted to experience wine tasting too. We found a charming local producer and a wizened old lady with a sale’s technique to beat any property mogul had me surrendering my hard-earned cash in exchange for a few bottles.
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Dinner was a glorious affair in the attractive town of Pezenas. I supped on breast of duck in a succulent fig sauce, one of the best meals I’d had in a long while. We chose to visit the place properly the following day, and returned, tired but satisfied, to our living quarters in Herepian. The former convent here has been delightfully renovated now offering six contemporary yet classic suites. Needless to say, we slept well.
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On our final day, we woke early to properly explore Pezenas. Its Saturday market seemed to attract the whole region, and for good reason. The array of mouth-watering produce on offer was staggering- cheeses, sausages, fresh fish, fruit (watermelon, cherries, apricots, nectarines…) and vegetables (the asparagus is renowned). Quaint squares are to be seen at every turn, with cafes and restaurants each more appealing than the next. The birth place of Moliere (France’s answer to Shakespeare), the playwright is celebrated in many ways, notably in street and cafe names and every summer impromptu plays are staged in courtyards for the delight of locals and tourists alike. We took the opportunity to view a development near Pezenas, which offers furnished luxury apartments in restored 19^th century buildings. At its heart lies a swimming pool and spa with a tiled Mediterranean courtyard, with full guest services and conference rooms, ideal for investors (ref 24697).
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Along from Pezenas lies Marseillan, a picturesque fishing port by the lagoon. Here the Port Rive Gauche development is entirely sold out- a charming rustic decor and uninterrupted sea views made sure of that.
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We managed to pack a lot into our morning, and after a lovely lunch on the promontory with views over the bay and the beach, we drove to Sete, known as the Venice of Languedoc. We took in a hotel residence right by the sea (ref 29546), and slightly further out a modern residence set in the hills with a pool and landscaped gardens (ref 14243). La Grande Motte, a seaside resort 45 minutes east of here offers a leaseback development nestled in a large landscaped park with swimming pools and leisure facilities, ideal for investment as the resort is very popular among the French (ref 30108).
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Finally, for a bit of relaxation, we headed 15 minutes east to Aigues Mortes. This beautiful fortified medieval town is set between the sea and lagoons, making for spectacular scenery. The development in the Aigues Mortes marina doesn’t disappoint (ref 27053), with small but perfectly formed Mediterranean houses, reminiscent of fishermen’s dwellings, some with their own moorings. Inside the town walls, the plethora of cafes, boutiques and restaurants see life go by at a slow, relaxed pace. It really is the perfect place to unwind. We enjoyed a leisurely meal of pizza with an ice cold beer, a lovely end to our trip.
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On Sunday morning we flew back from Montpellier airport. Our flight was at 10 am and we were back on British soil by 1pm, so quickly it felt like we’d never left…
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If you’re still unsure where to buy in the Languedoc, and weighing up the pros and cons of Sete, Marseillans, Aigues Mortes or any other town, don’t hesitate to get in touch.
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Jim Beattie
Direct line: 020 7428 4915
jim@sextantproperties.com
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With doubts regarding the economic growth, the European Central Bank (ECB) should not modify its key interest rate, at the record low level of 1%, before the next year. By consequence, Interest rates in August remain unchanged compared to July 2010. They are still lower compared to January 2010 with the Euribor 3 months rate at 0.899% so it is the still a good time to take on a fixed rate, at their lowest value ever.
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French interest rates and how they work
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Most of the French Mortgage lenders index their rates to the Euro Interbank Offered Rate, or Euribor, the average interest rate at which term deposits are offered between prime banks in the EU wholesale money market or interbank market. Just like the LIBOR serves as a short-term reference rate for British Pound and U.S. Dollar, the Euribor is widely used as a reference rate for Euro.
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The French banks usually index their rates to Euribor 3 months currently at 0.899%. Each bank applies a margin of between 1.30% to 2.50% depending on the lender and the product’s features.
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Variable products are usually redemption penalty free, although some banks may charge penalties in case of a re-mortgage. Fixed products are currently very low and very popular, but capped products starting at 3.50% and capped at 4.50% are also recommended in the current climate.
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Best French Mortgage products currently on the market
1. 100% LTV French mortgages with capped rates starting from 3.50%*
2. Rates fixed for the entire term starting from 3.15%**
3. Some French products are capped at 1% above the initial rate, to give you more security
4. Interest only mortgages with variable rates starting from 2.85%
5. Rates starting from 2.40% for equity release and re-mortgage
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* You would only be expected to pay the Notaire fees and the estate agent’s fees. Available only for properties of over €300,000
** Over a short term of 6 years on a repayment basis, for a loan of or above €230,000
***Higher rates may be applicable for longer terms and different loan amounts
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For more details regarding French mortgages, you can have a look at our website dedicated to French mortgages: http://www.sextantmortgages.com
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If you would like to receive a free quote with no obligation, contact our in-house mortgage consultants by telephone: 0207 428 4918 or by email: mortgages@sextantproperties.com
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The total figures of French property mortgages granted by the French banks in 2010 should reach €140 billion in 2010, which is 17% more than in 2009, but remains far from the 2007 record of €170.23 billion, according to a study by the French central institution of property mortgage security “Crédit Logement/CSA”, published last Wednesday.

However, French mortgage rates have continuously kept on dropping since the end of 2008, getting closer to their historical floor (3.36% in the 4th quarter of 2005), to settle around an average of 3.42% in June, whereas they were still at 5.07% in the last quarter of 2008. The consequence for borrowers is a decrease of almost 10 % in monthly payments in comparison with 2008, emphasizes Crédit Logement.

“Unemployment and purchasing power outlooks are still standing in the way of a real upturn in mortgages” says Michel Mouillart, the author of the study.

Despite the war for new customers among French banks, the other phenomenon affecting the mortgage market is the soaring of French resale property prices, which are now about where they were before the 2008 crisis.
Since the end of the 90’s, French prices have risen by 140%, and are now 22 times higher than in 1964, which is much more than the inflation, Crédit Logement notes.

Source: Le Figaro

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Major French developers all adopt LEB standards early (Low Energy Building).

LEB. For the last couple of months, it has been all the developers can think of. Behind this expression lies a new law, which will come into force in January 2013.

In practical terms, all housing will have to use less than 50 kWh (kilowatt hour) per square meter and per year. It is three times less than the current law. But it is just a national average. “The LEB law will be adjusted according to the regions. In Marseille, where the weather is nice, it will be 40 kWh; in Paris, a cloudier area, it will be possible to reach 65 kWh”, adds Benoit Arviset, development manager in Quatrinvest, a rental property investment specialist.

Bouygues, Nexity, Kaufman & Broad but also Les Nouveaux Constructeurs, Bouwfonds Marignan… Almost every big French developer has decided to anticipate the call. From the 1st of January for some or from the 1st July for others, all their developments have the BBC (French for LEB) label.

Tax benefits
The reason for such an enthusiasm is the great benefits developers can get out of it: in 2011, only BBC-labelled buildings will allow their buyer-investors to benefit from the Scellier system at its fullest, with a tax reduction of up to 25% for French investors. Without this label, tax benefits are limited to 15%. “It is quite a big deal for developers, because investors account for almost 66% of sales in France”, Paris-X University teacher Michel Mouillart adds.

Thus, the developers’ imagination is limitless when it comes to respecting the law. “Putting in condensing boilers is a good way to save energy” adds Bruno Corinti, chairman of Nexity Logement. “The building’s insulation is also very important” continues Marc Pigeon, chairman of the FPC, the French federation of developers.

Whatever the techniques used, professionals all agree on something: the shift to Low Energy Buildings increases the costs of construction by 8 to 12%, which represents an increase of 4 to 6% on capital assets costs.

In view of this situation, 2 choices can be made. Bouygues and Les Nouveaux Constructeurs both claim that their prices will not go up. The others intend to increase their prices to face this sharp rise in costs. “Because of the BBC law, our prices will increase by 3 to 5% next year” states Guy Nafilyan, CEO of Kaufman & Broad.

To find out more you can speak to one of our French new build consultants on 020 7428 4910

Source: Le Figaro

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Keeping your account in the UK while living in France is a possible but rather expensive solution, as banks very often charge for withdrawals and financial operations in a foreign country. This is why you should consider opening an account with a French bank, for holiday stays and especially for a permanent move to France. To do so will help you tremendously in day-to-day purchases but also for rents and if you’re thinking of getting a French mortgage.
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The procedure of opening a bank account in France is fairly simple, and you will just need to bring the following papers with you:
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- A proof of identity, such as a passport or a national ID card
- A proof of your address, such as water and electricity bills, or your housing contract
Once your account has been opened, you will be given a debit card usually called “carte bancaire” or “carte bleue” and a chequebook.
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Your first French carte bleue will cost you about €30. In France, cards work with the chip and PIN method, and your PIN code will always be asked for payments and withdrawals. Also, it has to be noted that some shops require a minimum amount, usually around €8, for card payments. It does not work quite the same as in the UK: the sums of money spent can be deducted from your account immediately or at the end of the month, depending on what you have decided with your bank. A signature will always be required for payments over €1,500. The “carte bleue” will be your best asset when living abroad, as you can use it to pay for almost everything. A huge majority of shops, restaurants, bars, cinemas, motorways, online shops etc accept card payment.
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Cheque payments are widespread in France. However shop owners may ask you for a proof of identity. It will take a few days between the day you actually sign the cheque and when the amount is debited from your account. It is very important to note that in France, it is illegal to try to pay by using a cheque with an insufficient account balance. That is why some shops systematically refuse any cheque payment. If you do write a rubber cheque, you might face an “interdiction bancaire”, which prevents you from writing a cheque and using your credit card until the situation has been sorted out. This is why you should always make sure you can cover your cheques.
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When opening a bank account, it is also important to choose which kind of account will suit you best.
A “compte courant”, French for current account, is a very active account which allows immediate cash withdrawal at anytime, and is used for common operations between the bank and its client.
A “compte sur livret” or “Livret A“ is the most used savings account in France. It is not used for day-to-day operations, but to yield interests.

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If you are looking for financing for your new leaseback project, the 104% mortgage product is one of the best financial products of the moment. Launched this July by a French bank, you only need to pay the bank fees. There are two options available with this product: repayment or interest only.

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Let’s take an example to explain how this product works. In Brittany, Sextant French Property offers a leaseback in Benodet. For €236,520 (VAT excluded), you can have a 1 Bedroom Apartment in a secured residence with sauna and heated swimming pool.
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Most of the time, when you ask for a mortgage, you receive a mortgage for 100% of the total amount of the leaseback property (VAT excluded)). In this case with the “104% mortgage”, you will be able to receive 104% of the total amount. That means it will cover the purchase of the property but also the legal and tax expenses.
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Thereby, to be able to buy this 1 Bedroom apartment in Benodet, you need to make a deposit of 5% of the value of the property (VAT excluded)) that is €13,492. You will get back this 5% deposit when you sign the deed of sales in front of a notaire. Consequently, you will only need to pay the bank fees: 1% of the total amount. That is €2,365 in the case of the apartment in Benodet. To be clear, your new property will only cost you the bank fees which means that you will just need to have this amount available.
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To sum up, here are the main criteria of the 104% mortgage:

- 5% deposit of the VAT price (back at the deed of sales).

- Mortgage on 104% (VAT excluded)

- Only need to pay the bank fees.
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To apply this 104% mortgage product, here are the main requirements to be eligible:

- Age: from 18 to 75 years old (before the end of the loan)

- Maximum debt/ratio: 30%

- Can be employed, self-employed or retired.

- If you apply for an interest only, you must have a side investment of 20%.
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This product is available for a shortlist of French leaseback companies. If you are interested, don’t hesitate to contact one of our Sextant Consultants on Sextant New Build Website. And if you are not eligible for this product, don’t worry! Contact one of our Mortgage Advisors by Sextant Mortgage Website since there will always be a mortgage adapted for your project.
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According to foreign exchange and international money transfer specialist Moneycorp, prospects are poor for the British real estate market, as 25% of potential first-time buyers consider purchasing a property overseas. This conclusion was reached after having asked 2000 Brits in the process of buying a property for the first time.
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This reluctance to buy properties in the UK can be explained by several reasons.
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First of all, housing prices in the UK have risen again since the 2008 drop and have reached expensive heights, which is rather disheartening for a person wanting to start out on the property ladder.
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When asked what the first thing to be taken into account during a property purchase was, 31% of first-time buyers consider currency to be the most important criteria. Unfortunately, the pound exchange has been very unstable lately, falling 17% in comparison to the euro and taking up again for 19 months in a row. These changes in value are an obstacle to a purchase, and even though the pound is getting stronger, buyers still think buying overseas the right decision to make.
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According to Moneycorp, 86% of first-time buyers are convinced that they will get more for their money in countries with stable currency and a thriving economy, preferably in the hottest, sunniest regions of the globe. The main trend among British buyers is that they would rather buy overseas instead of struggling to get an expensive home in the UK.
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The first destination for British real estate investments is Australia. According to Mr Wilson, head of the overseas property department at Rightmove.com, buyers see this country as a real alternative because of its homely image and the difficulty in getting an English mortgage. Then comes France, outranking Spain for the first time. Italy has fallen behind and so have the USA in the global popularity ranking.
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For more information, visit the Moneycorp page on the Sextant website.

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One of our French bank partners just launched a new product in order to finance a holiday home or a leaseback: “the Foncier 3-month variable rate”. This mortgage is based on the variation of the Euribor 3-month index that allows the product to perform like a reviewable rate. Currently at 2.70 %, this variable rate means that only the monthly payment evolves; the term of the mortgage remains unchanged. With a term from 6 years to 25 years, this mortgage offers a large flexibility as you will be able to pay back part or totally after 12 months without any fees.
Moreover, the borrowers who earn at least €50k/year can change to a fix rate at anytime during the length of the mortgage.

To sum up, here are the main points of this 3-month variable rate:
- 2.70% rate
- Based on Euribor 3-month Index variation
- Term from 6 years to 25 years
- Possibility to pay back after 12 months

Here are the main criteria to be eligible for this mortgage:
- Minimum joint income of €50k per year
- Age: from 18 to 80 years old
- Maximum debt ratio: 35%
- Must be a home owner

This brand new product is the perfect combination of flexibility and an attractive rate, a perfect way to finance your estate project.

If you want to receive more information regarding the Foncier 3-month variable rate, do not hesitate to get professional advice from our Mortgage Advisors in order to receive simulations for this mortgage. You can also visit our French Mortgage website for the latest rates available.

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