So life annuity is coming back- what are the reasons for this return? Increasingly we’re seeing that  low incomes push owners to seek a supplementary pension for their retirement, and the increase of house prices is also preventing low income households from buying. “The system allows the buyer to prepare his own retirement while enhancing others’”, states Venance Gaymard, director of Life Annuity Europe. For a French property sale with deferred payment, the annuity offers the buyer the opportunity to only pay a lump sum upon purchase and then a monthly amount paid until the decease of the seller. The advantage is that the property value, calculated according to the right of use and occupancy (95% of life estates are occupied), can be reduced from 30 to 50% depending on the age of the seller.

However, one must exercise caution: life annuity is interesting only if the contract is well balanced and includes calculated incomes according to the means and plans of both parties, in particular in cities such as Paris where the sellers are numerous. A win – win situation for example would be for a couple in their forties, delighted to offer themselves a house in the hinterlands of Nice, for 69,000 Euros and a monthly allowance of 575 Euros , currently paid to the owners who are in their seventies.

Nevertheless, life annuity still remains a fairly niche market. Even if the acquired French property continues to increase in value throughout the contract period, buyers are often afraid of having to pay (too) long, keeping in mind the image of a sprightly, healthy 100 year old owner.

It is very easy to draw a parallel with UK house prices as seen on the Rightmove house price report:

It is quite easy to understand this trend: fewer people are looking to purchase a property during the winter season because they focus on Christmas and New Year festivities, that is why they usually postpone their important projects to February or spring.

What does that mean?
It means that with fewer buyers on the market at this precise time of the year, it is easier to negotiate the price of a property in France or in the UK.

There is another element which is equally important: Sellers are more incline to accept an offer from a buyer who can prove he can move fast by being a cash buyer or having an agreement in principle (AIP) from a French bank.

At Sextant Mortgages we have the latest lending criteria and rates from our bank partners and we can provide an AIP within 48 hours. It gives buyers more negotiating power with sellers by showing an AIP to the agent during the visit (the French agent always help you in the negotiation).

What next?
If you are going home hunting in France in November or December, you just need to contact one of our mortgage advisers on this number:
+44 (0) 207 428 4918 or by filling this contact form on our website:

Before you travel to France to visit properties make sure you start your mortgage application with Sextant so we can provide you with our in house Agreement in Principle which will increase your negotiating power and will enable you to purchase your dream property at the best possible price.

The new CGT version consists in:
- 2% abatement per year after 5 years of ownership until 17 years of ownership
- 4% abatement per year during years 18 to 24
- 8% abatement per year during years 25 to 30
- No CGT after 30 years

In another way, the tax rate for non main-residences will increase from 31.3% to 32.5% for French residents and will remain at 19% for non-residents.

As an example always give a better idea of the consequences, we compare the two CGT’s payable to a French property purchased at €100,000 with a price appreciation of 2% per year.

As you can notice, the impact on the net profit isn’t very important when you look at the net profit.
Another possibility to avoid paying the new CGT would be to turn the property as your main residence for a few years (subject to the appreciation of the French tax office) with a perspective of selling it.

What will happen next?

In the short term:
- French property owners who possessed a property for more than 15 years and who were considering to sell it will try to do it before the end of October to avoid paying the new CGT (it usually takes 3 months between the sale agreement and the signature with the notaire)
- It will Increase the offer with numerous properties arriving on the market
- Prices are expected to decrease until the 31st October 2011

In the long term:
- Properties which haven’t been sold before the deadline (notaire signature before 1st February 2012) will be taken off the market and owners will wait a few years to have more abatement.
- People who don’t have to sell will be waiting longer and less incline to negotiate the asking price
- Decrease of the number of properties on the market
- Prices will increase and get back to August 2011 levels

What to do?
September, October and the beginning of November are the best time to buy a French property. Numerous owners will sell their properties with a lower price to make a notarised transaction before the 1st February 2012.
Please note you need to keep in mind the deadline as you have to sign the “compromis de vente” 3 or 2 months before the 1st February 2012 (it is due to the verifications done by the notaire which can take some time). As you can also guess notary offices will be very busy in January 2012 but they will do their best to please everybody.

Happy hunting!

-          Increase public awareness to the importance of preserving the heritage of French country houses
-          Identify the buildings and sites threatened with destruction
-          Encourage mutual help in favor of promoting French heritage, with the aim of seeking funds from both private and public sources
-          Participate in the implementation of restoration programs

The foundation acts in favour of non protected sites which are generally more in peril than monuments already labelled or listed by  French heritage institutions.

The organisation does not only help properties but also outbuildings such as traditional bread ovens, barns, dovecotes, cottages, etc… In fact, more than 1000 sites a year are granted the foundation’s label. The help comes in the shape of fiscal discounts (partial or total depending on the condition of the building) if you start renovation works on the listed  site. Moreover, if your taxed amount is lower than 1300 Euro, the foundation can also send you some grants to help you with the renovation costs.
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The foundation receives its funding from 2 main sources:

-          Corporate sponsorship
-          State  subsidies
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Since its creation, 9043 projects have benefited from this label. However, these grants are not accessible to everyone. In fact, you will have to respect 3 main conditions in order to apply for this grant:

-          The site must be interesting in terms of heritage (must have a history and particular architecture)
-          The fiscal discounts won’t be granted if your renovation project lacks ambition
-          Visibility of most of the buildings from the road
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The foundation is having real boom as the fund total reached 8.3 million euros last year which represents a rise of 26% compared to the amount collected in 2009. Therefore we can expect more and more will be done to help private owners restore their monuments.
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The actions of the “Foundation du Patrimoine”, does not limit itself to private French properties but also helps monuments that are already protected  who urgently need help. For instance, the foundation launched an international appeal to receive funds to restore the last house of Napoleon Bonaparte on Sainte Helene, which had been considerably affected by terrible weather conditions.

This example perfectly illustrates the leitmotiv of the organization, which aims to make us understand that cultural heritage is the responsibility of all: associations, businesses, households, and governments.
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The organisation does not want to be labeled as old fashioned and nostalgic. On the contrary, this recent foundation is constantly looking ahead in order to offer a new life to all these monuments in peril. More than restoring, it’s about bringing back to life!
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Our old monuments mustn’t be considered  a burden; indeed the foundation sees the wealth and uniqueness of each and every one of these sites. And it’s a real lesson for all of us to change our opinion on old monuments.

You can find more information about la fondation du Patrimoine’s action on www.fondation-patrimoine.org

It appears everywhere, with new build developers, house builders, renovators… Even the PTZ+ (new interest free loan) welcomes it honourably… In short, the energy efficient label (BBC) which will become incontrovertible by the 1^st of January 2013 has become an essential stage.

What form does the BBC Effinergie label take?

Building a new accommodation involves respecting thermal regulations (RT). In the meantime and before the RT 2012 for residential housing takes effect, it is the RT 2005 that prevails. But the BBC label in new build has further requirements, on the basis of a frame of reference established by the Effinergie Association. At national level, a BBC building has to meet a certain threshold of air permeability and consume a maximum of 50kWh/sqm/year of primary energy (80kWh/sqm/year for the renovation, according to the decree of September 29^th 2009). However, this value is modulated according to climate areas and altitude. A coefficient which varies from 0.8 to 1.3 according to regions is applied at the value of 50kWh/sqm/year. If the building is located in the Yonne department, for example, its primary energy consumption will be calculated according to a coefficient of 1.3. It will respect an energy efficiency of 65kWh/sqm/year. In southern France, this coefficient is reduced to 0.8, which means 40kWh/sqm/year. It is the same if the building is situated at altitude (coefficient from 0 to 0.2).

What is primary energy?

It is the energy available in nature before any transformation. For BBC new builds the average of 50kWh/sqm/year of primary energy is based on heating, hot water, cooling, ventilation and lighting consumption. It does not represent the final energy consumption, that is to say the one including other home equipment (household appliances, hi-fi, TV etc.) which increases the energy consumption from 50 to 60kWh/sqm/year.

What does the BBC label offer?

It offers a higher comfort level energy savings. Compared to accommodation built according to the RT 2005 which consumes an average of 150kWh/sqm/year, BBC buildings reduce the bill of primary energy by a third. A significant sum when energy prices keep increasing. However a damper on proceedings: the average consumption of BBC buildings is based on conventional use (19˚ C in the daytime, 16˚C at nighttime in bedrooms). Without respecting certain criteria (if you open windows even when the heating is on or if you are not satisfied with 19˚ C as a daytime temperature for example) the bill may increase noticeably.

Other precision: the BBC label is allocated to buildings and not to apartments, whereas between an apartment situated on the ground floor and another on the top floor, there are inevitably differences. Another advantage, the possibility for first time buyers to obtain an amount of PTZ+ that is much higher for a BBC than a non-BBC. Regarding rental investments, the Scellier operation also privileges the labeling, meaning new BBC buildings benefit from a tax reduction of 22% compared to 13% for others, that is to say a difference of 9 points.

What price:

A new build trademarked BBC costs on average 5 to 6% more than classic accommodation. This is explained by the necessity of improving the building insulation, increasing air tightness, and installing more efficient heating, hot water and ventilation systems.

Who deliver it?

Three organisations certify residential housing: Cerqual (new or renovation), Promotelec and Cequami, the last one only working with individual properties.

The conception of an eco-friendly district is twice as long in France than in other countries, and a period of 4 to 5 years is needed between the planning of a city centre redevelopment and groundbreaking: our town planning rules make us waste a lot of time. Add to that unwelcome surcosts when today France lacks housing.

There has been a strong command from the President on urban planning reforms. He mentioned it again at Le Havre some days ago, highlighted Benoist Apparu.  His working parties have been working on it for several months.

And yesterday, the four working parties created for the occasion and composed of housing professionals and local councillors, announced their suggestions in front of Nathalie Kosciusko-Morizet, the Minister for the Environment, and Benoist Apparu.  The last arbitrations will be given late May so the rulings go to the council of Ministers before summer and are applied after the summer break.

First constituent of the reform: building permits. “Working parties advocate that the registration of a building permit only becomes obligatory from 40 sqm compared to 20 sqm currently.  Benoist Apparu added: “It is necessary for French people to be able to expand their home easily”. Also, the time frame for building permits may be reduced. Thus, in a conservation area, households may only wait 5 or 6 months instead of more than a year.

To boost the construction industry, the government also wants to play on tax reductions. At present it is in the interests of those owning a plot of land that hasn’t been built on to keep it for as long as possible. Indeed, in the course of time, prices keep increasing and taxes get lighter.

Capital gains tax should see a 10% reduction in five years, meaning tax exemption after 15 years. “For a plot of buildable land that hasn’t been built on yet -and only in this case- we want these reductions to be removed.

Benoist Apparu explains that the capital gains tax will be the same for a plot of land sold after a year or after 15 years in order to fight against the retention of ground rent.

An evolution which adds to the overhaul of building permit taxes which was voted late 2010 and reduces from 17 to 5 the number of taxes to pay for the issuing of building permits. This will make buyers lives easier without however reducing their bill (the amount of the 5 taxes being the same as that of the 17).

“We are also trying to change the way we calculate property surfaces so it becomes more in keeping with the Environment round table. Nowadays, in the administrative count, a household that installs insulation panels on the walls of their accommodation undergoes a surface decrease. This should not anymore,” details Benoist Apparu. A precaution that could increase prescribed surfaces of apartments and houses by 10%.

-          Inform yourself about grants to finance renovation works and reducing the  tax you pay…

Soaring prices in real estate haven’t been kind to the most popular tourist spots, making the “Pied-à-Terre” unaffordable. Therefore it is worth looking for houses to renovate which can be purchased at better prices. But be very careful as some renovation works could cost you four times the purchasing price, in addition to the fact that in protected areas, you will be obliged to take into account punctilious town planning restrictions.

Solution: speak to the Heritage foundation which could offer you a local Petit Patrimoine label which helps with 50% of the costs regarding roofing and façade. The only condition to benefit from this advantage is for your property must be of  architectural interest, and apparent from the road. It could be a mere 20^th century manor for example.

-          Maintaining your garden cost efficiently

In areas that see more rainfall, you have to mow the lawn every two weeks in spring/summer: the energy cost is likely to be high!

Solution: the cheapest idea is to contact a local gardener (between €15 and €18 per hour including charges). If you pay with service-employment cheques, you could save half the taxes.

-          Invest in regular maintenance of your swimming pool:

Except the installation cost (€12,000 or so for a small mono hull), plan €350 for water consumption including evaporation, up to €300 for cleaners, €1,000 for the filtration robot to be replaced every 5 years and €2.500 for the replacement of the “liner” every 10 years, the transparent and waterproof cover on the pool.

Solution: it is better to carry out small maintenance regularly than a complete cleaning before the beginning of summer. Thanks to this method, your swimming pool will last a further five years!

-          Current expenses:

Focus first on low-energy heating and those utilities you can reduce consumption of: water, gas, fuel, phone subscription… If your habitable surface doesn’t exceed 100sqm, try a wood-burning stove (from €1,200). This sort of unit will be paid off after five years of usage. As regards wood, it costs around €280 per year, i.e. half the price of electrical heating systems.

-          Taxes:

The taxman won’t be your best friend. Make your choice wisely as different towns pay different taxes- for example in Nice, taxes amount to €2154 a year on average compared to €1761 in Menton. That’s nearly €400 difference between two towns only 32km apart, both located on the Mediterranean coastline!

For an umpteenth month it was investors’ hopes and fears for UK interest rates that were mainly responsible for sterling’s ebb and flow.  It was mostly a case of ebb, as one statistic after another added weight to the notion that the first rate increase would almost certainly not now come in May. It might be August but there are plenty of analysts out there who think November looks more likely.

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It did not help sterling when inflation dropped from 4.4% to 4.0% in March. Few had expected such a drop so the surprise element added to the dampening effect. The Bank of England’s decision to keep interest rates steady at 0.5% was therefore fully expected. Once again the monetary policy committee’s voting decision had six members preferring to stick with the status quo while the same old three favoured a rate increase. Towards the end of April even that small hawkish clique was looking shaky. Two of the trio said publicly that they would stop voting for an increase if economic growth were to weaken and one, their ringleader Andrew Sentance, ends his term on the committee after next month’s meeting. It suddenly began to seem possible that there would be note votes at all for a rate increase in June.

The weakness of the UK economy was confirmed by the figures for first quarter gross domestic product (GDP), which grew by 0.5% as analysts had forecast. On its own it was not an awful figure but all it achieved was a reversal of the -0.5% shrinkage experienced in the fourth quarter of last year. Take the two together and Britain’s economy has stagnated for six months, not at all the required outcome. The best that could be said of the GDP number was that it might have been worse.

The euro zone GDP data for Q1 have yet to appear but that has not held back the euro. As investors toned down their expectations for higher sterling interest rates they cranked up their enthusiasm for rising euro rates.  The first increase came, as promised by the European Central Bank (ECB), when it raised its Refinancing Rate to 1.25% after 23 months at 1.0%. The move had been so well telegraphed by the ECB that there was no element of surprise, just confirmation that things really were on the move in Euroland.  Whilst there was no hint from the ECB president that another increase would follow in May, few investors are in any doubt that there will not be more in the pipeline.  Two Euroland central bankers confirmed as much later in the month. Austria’s Ewald Novotny said the market’s expectation of a further 50 basis points’ increase in the refinancing rate by the end of the year is “well founded”. Luc Coene of Belgium said “conditions are too accommodative”. The next move might not happen in May but it will come, and there will be more to follow

It is mainly that difference that is driving the sterling/euro exchange rate at the moment. The problems of Greece and Portugal are almost a side-issue. In Britain inflation is 4% and the Bank of England is rooted to its 0.5% Bank Rate for what seems like the duration. In Euroland inflation is 2.7% and the ECB is doing something about it; there is every chance that the refinancing rate could be above 2.5% by this time next year. As long as that distinction remains, the pound will find it hard going

In a garage your car will be protected from winter’s freezing temperatures. In France, the average life  of a car that doesn’t get put into a garage at night is between 7 and 8 years. Of course, it also depends  on the mileage, but a car in France whose owner has a garage will last for twice as long as  a car which does not,  meaning it is worth having a garage at home.

A garage is better than a car port because of the difference between outside and inside temperatures which have a great influence on the engine and the car starter.

One judicious and affordable method is to build your own garage even if you’re not good at DIY. In case you feel unable to build the frame, you could still carry out most of the work. The simplest method is the following one:

1) Find the right location

Find a patch of flat land far from large trees. If your property is located near Marseille on the French Riviera, be aware of the Mistral wind which causes a lot of damage each year there. Be cautious and take the time to think about the exact location of your garage.

2) Convert the area

Once you’ve chosen the location, take your car’s measurements to compare them with the size of your future garage. When measuring the width of your car, add 2 metres more for space… to leave the car of course!

Leave a 50cm space between the entrance and your car to put a door, and leave a maximum of 20cm in front of your car: don’t waste bricks and make your work efficient.

Regarding the floor, it is up to you. You can use gravel, cement, and even tiles if you want… Whatever the floor, it won’t change the insulation of your garage.

3) Use breeze-blocks and concrete

It is totally pointless to build a wooden garage (unless you find special wood made for that type of work) as it is not the best material for insulation. Moreover, normal wood is not very resistant and tends to become rotten quickly. The most important are the walls. Buying bricks in many DIY shops  is not very expensive (from €1 a brick second hand). The construction itself is very simple: put a maximum of 4 centimetres of cement and lay down a brick.

Do not forget to also put cement between the bricks and to place them in staggered rows. For the angles, put the bricks as shown on the picture below:

4) Your garage’s roof

For the roof, you are not obliged to lay tiles. Lay down a huge metal sheet and fix it to the top of the walls. One thing is very important, the metal sheet needs to be inclined slightly to evacuate rain water or snow, otherwise it risks collapsing onto your car.

=>  Note that this process is the simplest one. You can build a garage with a bigger habitable surface for a workshop or storage. There are plenty of solutions to build and convert a garage.

=>  In case you don’t know how to make concrete, it is still possible to build a garage in cob (a mix of mud and straw). This material has the advantage of insulating very well.

If you like shopping in Marks & Spencer stores you will be happy to know that after a decades’ absence, the Dutch chief executive Marc Bolland announced on April 1st the comeback of the British retailer onto the French market.

The main store will be number 100 on the Champs- Elysees Avenue (formerly the “Esprit” shop), and will open in November, just in time for the Christmas period.

This 15,000 square foot shop will be on 3 floors and offer women’s fashion, lingerie and fresh food such as: sandwiches, salads, fruit juices or ready-cooked meals.

The retailer is also looking for some sites to open Marks & Spencer Simply Food stores in and around Paris in partnership with the SSP group. These stores will make many happy amongst those who’ve been demanding the return of Marks & Spencer in France for the past ten years.

It will also allow French people to (re)discover British sauces, meals and sweets like scones, teas, mint sauce, coleslaw, Scottish smoked salmon, shortbread and many others.
The chief executive also plans to open department stores where clothes and food would be sold under one roof.
As well as this happy news, Marc Bolland announced the launch of a French website. Dedicated to French customers and priced in Euros this international website will offer 10 thousand products and delivery across France.

Here is the link of the website: www.marksandspencer.fr

Marks & Spencer, the UK’s largest clothing retailer with a significant presence on the food market, is well appreciated by French people and has a great brand image in France. This is the reason why Marc Bolland is very excited by the opening of new stores in France and wants “to come back in an extremely positive way”.

In 2001, the British retailer which was directed by the Belgium Luc Vandevelde, closed its 38 stores in Western Europe including the 18 stores located in France (sold to the group “Galleries Lafayette”), where 1 700 employees worked. This closing down sparked off trade union demonstrations for several months and in 2005 the Court of appeal of Paris fined Luc Vandevelde 3 750 Euros for hindrance to the functioning of the works council.

So if you are planning to go on holiday or move to France and are afraid of being homesick you will soon be able to do your shopping in Marks & Spencer stores and buy your favourite foods.