France may be the closest country to us geographically, but it doesn't mean we are anything like the same.
While the UK media spreads doom and gloom about ongoing falls in property prices, the latest French results show a year-on-year increase of 2.7%. As ever its a variable picture depending on which region we look at, but Paris prices have been very strong as have the Alps and the south. In other words, the areas where we recommend leaseback investment!.
The outlook for mortgage rates is a possible rise in the French bank rate during April or May, so if you are seriously thinking of making an investment now would be a good time so you can lock in the current mortgage deals.
The 3 month Eurobor, the rate used to price most French mortgages, has gone up by .15% to 1.2% in the first quarter. French inflation is forecast to hit 2.4% this year, hence the pressure on the central bank to raise rates.
Whether the rate creeps up a bit or not, rates remain at historic lows but we shouldn't take them for granted. If you're as old as me and you remember 14.8% mortgages and negative equity in the 1980s then you'll agree that these are good times to borrow against long term incoem generating assets.
Best wishes
Graham
The Leaseback Team
+44(0) 20 8940 7000
