Experts are agreed that 2010 is the time to invest in French property provided you finance the purchase with a Euro mortgage through BFM.
Why? Because the French market has bottomed out in terms of pricing and there are major bargains to be picked up in most areas.
But what about the exchange rate, surely the poor sterling/euro exchange rate makes French property a bad deal for British buyers?
Not if you take the maximum mortgage available, usually 80 to 85% of the property valuation.
The reasoning goes like this:
If you buy for cash you do indeed risk exchanging a lot of money for Euros at a bad rate.
If you take a mortgage, then one of two things will inevitably happen.
Either Sterling falls further against the Euro, so the value of your property increases in sterling terms;
Or Sterling recovers against the Euro. Your property value goes down in Sterling terms BUT SO DOES YOUR OUTSTANDING MORTGAGE.
It’s called hedging and is the first thing young international bankers are supposed to learn.
Keep your assets (the property) and your liabilities (the mortgage) in the same currency. Anything else is a decision to take a foreign exchange risk.
For more details see the Best French Mortgage Market Trends page.
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