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France's boom - 2 November 2007

The last few days have seen plenty of gloomy headlines about the UK property market, with predictions of crashes, rising repossessions and falling mortgage lending. In contrast, it has been argued, the prospects seem particularly healthy for France.

Such an argument has been taken up by VEF, who report that our nearest continental neighbour is enjoying a rise in prices and popularity just as the UK slumps. They note that the story admits that things may not be so bad in the UK and strongly suggests the press is trying to "sensationalise" the idea of a crash.

Even so, VEF notes, the prospects for France do look good and foreign property investment is growing. The British, Dutch and Germans have been buying up French holiday homes at a "remarkable rate", with an estimated total of 500,000 Britons owning properties in the country.

On top of this, industry watchers suggest the demand for more property in France is likely to increase over the coming months.

Yet one does not need to forward arguments that UK property is in decline to suggest French property will remain popular with UK buyers, given that it has been second only to Spain in the last few years as a UK property investment hotspot, all while our own domestic market has boomed.

Part of this continued popularity may be down to some new markets turning out to be less profitable or sustainable than suspected, but there are some excellent examples listed by the Financial Times in the report the site mentioned, such as Chamonix in the Alps, where capital appreciation ranged form five to ten per cent over the last ten years.

But there are other factors boosting France too. While Ferries and the Channel Tunnel offer two options for travel from Britain particularly between southern England and northern France, the number of low-cost flights are also increasing, raising the prospect of increased tourism and thus buy-to-let opportunities in certain areas.

 

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