Normandy Property Price Update

Description:

The recession and fall in value of the pound sterling against the Euro has clearly resulted in a reduction overall of sales of properties in France to would be-British buyers during the past two years or so.  In fact the total sales of properties in  Normandy and other regions have reduced considerably whether to British or French buyers.

However prices vary considerably from region to region and from town to town. Some towns and cities have seen price rises for houses.  At Le Havre, Fécamp and parts of Rouen prices have risen by up to 8% over the past year, whereas other areas such as the Pays de Caux, in rural Upper Normandy, have experienced price falls of around 3% and even more in some places.

In some cases of property sales and purchases between British buyers and sellers, it has been possible to hedge the effects of fluctuations in exchange rate between the pound sterling and the euro by structuring the deal in pounds sterling. This is done by agreeing and fixing a pound sterling equivalent of the euro price of the French property. The British buyer then deposits the sale price of the property in the UK bank account of the British seller.

At the time of the agreed sale and purchase a deposit will have to be paid in euros.  This is used to pay any stamp or other duty and the fees of the French notaire (solicitor). This arrangement is perfectly acceptable to the French authorities as the sale and purchase documents will indicate a price in euros.

Some people believe that the fall of the pound against the euro has been overdone and that the reverse is likely to occur. They are accordingly taking out mortgages on French properties in euros in the hope that this will result in a lower sterling cost when the mortgage is eventually redeemed.