Mortgages are now available in the country for 104% on both a repayment basis, from 2.6%, and an interest-only basis from 3%. Furthermore, some lenders are now offering additional finance to cover the cost of stamp duty and taxes which can be up to 8% of the value of the property.
According to Athena, interest in French leaseback property has been strong over the first six months of the year, with many developments selling out in record time. The number of clients searching for French leaseback mortgages increased by more than 50% in the first half of 2010 compared to the second half of 2009, while the number of enquiries remained stable during the last quarter.
UK investors struggled in the past to secure leaseback properties in the face of stiff competition for apartments from their French counterparts who have the added incentive of the Loi Scellier, a tax break from the French government which allows a portion of the value of the property to be offset against income tax liability. This new mortgage offering is expected to boost interest in the leaseback market amongst UK investors.
John Busby, director, at Athena Mortgages said: “This is fantastic news for investors looking to buy a French leaseback through reputable developers. Not only are interest rates at historic lows and likely to remain so for some time, this higher level of loan to value means there is very little money to transfer to France to complete the purchase. With the pound now at a 19-month high against the Euro and set to strengthen further, conditions have never been better.”
