When a studio flat goes for nearly £300,000 in London's Bethnal Green it's enough to make you reach for a bottle of Chateau Lafitte, kick up your heels and curse into the bottom of your glass about the price of UK property. Take a glance across the channel to Paris though, and you will find that not only is the wine cheaper, but so too is the property.
However, the attractions of conventional buy-to-lets in Paris are limited: yields are relatively low at 3.5% and tenancies are inflexible. But in the best locations, letting to tourists is "making a 6.2% yield, and that is after costs and with occupancy at 80%", Jean Phillipe Roux of estate agent Knight Frank told The Mail on Sunday.
But you should be careful where you buy, says Stephanie Rosenbloom of The New York Times. Forget the sixth and seventh arrondissements, which overlook the Eiffel Tower, Luxembourg Gardens and Muse D'Orsay. Instead, consider developing arrondissements "where the city's bohemians and bobos' (bourgeois bohemians) flock: the 10th, 18th and 19th".
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
The 18th arrondissement, the area of Montmartre, is on top of a hill overlooking the city and is home to the basilica of Sacr Coeur and Au Cliron des Chasseurs, where Ernest Hemingway ate when he had the money. It is also one the most visited areas by tourists to Paris. Property costs about $670 a square foot on the west side of the arrondissement and about $440 a square foot on the east side, "which is undergoing gentrification", says Yolanda Robbins of French Property Insider in The New York Times. "The key is to buy in the heart of the tourist area, furnish to a high standard and get a good agent," says Duncan Farmer in The Mail on Sunday.
The 10th and 19th arrondissements do not attract as many tourists, but there's still a lot of property that is under-priced because it is in need of "renovation and gentrification", says Adrian Leeds, editor of www.parlerparis.com, also in The New York Times. She says that long-term rentals in these areas are about $320 to $430 a month.
The biggest drawback to buying property in Paris, however, is bureaucracy. If you are a resident of France for tax purposes or a non-resident with substantial assets in France (e720,000 in 2005), you must submit a wealth tax return each year. A house-buyer also has to pay legal fees and taxes of about 6% of the purchase price and at least 5% to the estate agent.
The taxe foncire and taxe d'habitation, similar to the UK council tax, cost about £135 a year. Also, be aware that it is the buyer's privilege to select their own notary, or notaire'. Many agents may pressure you into using the vendor's notaire', but this is rarely the best move.
Specialist property agents, such as www.frenchproperyinsider.com, can help you with everything from locating a suitable property to getting a mortgage. Although expensive, it could prove less time consuming than trawling around the 4,000 or so property agencies in Paris, which do not operate a multiple listing service.
Alternatively, one of the bigger agencies in Paris is Century 21 (https://en.century21.fr/proposer_bien/), which has a total of 35 property agencies in the city. Another is FNAIM, a large group comprising various estate agencies in Paris and throughout France. Try https://www.fnaim.fr/ or https://www.fnaim.fr/immobilier/agence-immobiliere-paris.aspx.
If you are looking for a mortgage from a French bank, UCB (part of BNP Paribas group, see www.ucb-french-mortgage. com/index.asp) and Credit Agricole's specialist service for Irish and British customers (https://www.britline.com/g1/index.htm) are particularly helpful. They offer a telephone and banking service in English, and there is no need to come to France to open your bank account.
One of the most comprehensive websites is https://www.frenchentree.com/, which is an excellent resource on everything Gallic, from property to food.
-
Water companies blocked from using customer money to pay “undeserved” bonusesThe regulator has blocked three water companies from using billpayer money to pay £1.5 million in exec bonuses
-
Will the Bitcoin price hit $100,000?With Bitcoin prices trading just below $100,000, we explore whether the cryptocurrency can hit the milestone.
