Competition between French banks for domestic buyers has created the best opportunity for UK and international investors to borrow money in France since the end of WWII, or so says Athena Advisors.
Apparently non-residents can access these all-time historic low rates with a 20 year fixed rate mortgage now standing at 3.35 per cent and a 20 year tracker mortgage from 2 per cent.
Nicholas Leach from Athena Advisors said: “The European Central Bank has remained stable so these new rates are simply down to the fierce competition between the banks for the best applications… These are the best rates investors have seen for over 65 years so it’s no surprise we’re seeing investors choosing to lock in some long term value in French bricks and mortar.”
John Busby from French Private Finance, Athena Advisor’s sister company which specialises in French property finance, added: “The cost for a €100,000 loan has now dropped to €572 per month for a fixed rate over 20 years and €502 per month for a variable rate at 2 per cent. If you strip out the inflation element which is currently 1 per cent, then the current variable rates are effectively at 1 per cent and fixed rates at 2.35 per cent in real terms. However you look at it, this is incredibly cheap money.”
Leach continued: “With such low rates it is now much easier for investors to find self-financing properties, especially in central Paris and the Alps. Seasoned investors understand that these rates won’t be around for long so they’re trying to capitalise now.”
After tactically moving to underweight on 13 March, S&P Capital IQ Equity Research observes that the risk-reward balance has reversed as growth has slowed and events in Southern Europe have weakened the previously bullish investor sentiment. Furthermore, while reflation suggests rising P/E valuations – generally driving consensus optimism on equities - this does not necessarily assume a straight path.
© Investment & Business News 2013