UK and international investors are being drawn towards buy-to-let French properties as French mortgage rates reach all-time historic lows, according to Athena Advisors.
The French property specialists has reported that 20-year tracker mortgages at 2.20% and 20-year fixed rate mortgages at 3.55% are currently available.
Loan-to-values of up to 85% are also available.
“France’s socialist government has now been in power for seven months and it continues to implement pro-growth measures and clarify its initially confusing position on taxes,” said Nicholas Leach at Athena Advisors.
“This combined with historical low interest rates set by the European Central Bank and the very attractive French mortgages market is resulting in increased investor activity in the buy-to-let property market. Fixing a mortgage at such a low rate enables international buyers to lock in a huge amount of value and in many cases the rental returns provided by ski properties for example cover a large part or all of the mortgage payments. High loan-to-value ratios also mean that only small deposits of 15% are required.
“French banks as always are keen on providing finance to good clients and the ECB’s rates have made the market highly competitive,. Buy-to-lets are seeing the most activity and in the Alps this means French leaseback properties.”
He added that leaseback buy-to-let properties, whereby a buyer purchases the freehold title of a furnished property and then leases it back to a management company for a fixed rental return provide buyers with a cost effective way of owning a ski property.
“Leaseback properties have been popular for a long time but with today’s mortgage rates and the competitive prices available on the market, ski leasebacks have never been so popular,” added Leach. “As long as the management company is of strong credentials, leaseback properties provide international investors with a cost effective way of owning a ski property.
“Ski apartments with rental returns of up to 4.7% are currently available in some of the Alps best ski resorts. These returns provide buyers with stable and consistent income which can cover their mortgage payments. Leaseback properties also enable purchasers to recover 19.6% VAT on the price of the property and provide low-cost holidays for those who want to use their home during the ski and summer seasons.”
