property


French banks introduce mortgage lending rules for expats

by Ray Clancy on July 29, 2015

Expats looking to buy a home in France are facing tougher lending rules from some banks and even being required to have up to two years’ worth of mortgage payments in a separate account.

An increased demand for mortgages due to historically low mortgage rates rising in France has led to a reduced credit supply, according to experts.

Expats in France are facing new, tougher rules around securing a mortgage

There are also staffing problems in some banks who were not prepared for a sudden increase in mortgage applications, according to John Busby, private clients director at French Private Finance.

‘The sheer rate of increases in lending is also becoming a concern for the credit risk mangers that want things to slow down. This may happen on its own, as they don’t have the staff to cope,’ he said.

Some lenders have responded to this problem by temporarily refusing to accept any new applications at all, while others are no longer willing to lend against the property alone, hence the demand for money in a separate account.

The requirement to have between 12 and 24 months of mortgage payments in an account, comes on top of the expectation for clients to have life insurance, home insurance and to maintain a good level of savings. These banks making these demands include big names such as Societe Generale and Credit Agricole.

It means that those seeking mortgages need to shop around, which can be a complicated business. ‘Whilst the fees and outlay for obtaining these loans may be costlier, there is a tradeoff, with lower rates offered as a result,’ Busby explained.

His firm is always looking for good deals and says it is possible to still get a mortgage at 2.2% over 20 years at 60% LTV, with 12 months payments in a savings account and a fee of 1%.

The restrictions come at a time when more British people, including expats in France and those living in the Middle East looking for a holiday home, are buying more properties in the country.

‘In rural locations prices are still below the peak and property in Paris is more attainable than in, say, London or New York,’ Busby pointed out.

The strength of sterling against the euro is adding to the attraction for British buyers who are getting 13% more euros to the pound than a year ago.

‘Many of the large resident lenders are no longer willing to undertake standalone lending, loans secured solely on property or le credit-sec as it is known,’ Busby explained, adding that the best deals are often only available through a broker.

{ 0 comments }

Thumbnail image for British expats seek to capitalize on ‘hot’ buy-to-let market in UK

British expats seek to capitalize on ‘hot’ buy-to-let market in UK

June 24, 2015 property

British expats, particularly those living in the United Arab Emirates, are taking advantage of rising rents in the UK to purchase investment properties. London is the most popular location due to a high demand for buy-to-let rental properties and good yields for landlords, but expats are also looking outside the capital city. Offshore bank Skipton […]

Read the full article →
Thumbnail image for UK general election result set to boost property sales to expats and foreigners

UK general election result set to boost property sales to expats and foreigners

May 19, 2015 Britain

There are signs that British expats have been buoyed by the country’s general election outcome and are looking at investing in property as a result. De Vere Mortgages, which specialises in loans for expats buying abroad or in the UK, as well as foreign nationals buying in the UK, has reported a noticeable surge in […]

Read the full article →
Thumbnail image for Mortgage Demand from British Expats Soars

Mortgage Demand from British Expats Soars

January 29, 2015 Britain

British expats seeking a UK mortgage should not be down heartened by reports that they are considered high risk by lenders and therefore often turned down, it is claimed. Many complain that they have difficulty securing a mortgage as they have a lower or non-existent UK credit rating as they have lived outside the UK, […]

Read the full article →
Thumbnail image for Expats in Spain buying more property, official figures show

Expats in Spain buying more property, official figures show

January 23, 2015 property

Expats in Spain are buying more property, but they could find themselves competing with an influx of buyers from abroad, according to real estate firms. Figures from the Spanish Ministry of Public Works shows that foreigners resident in Spain bought property worth €6,077.4 million between January and September 2014, a rise of 28.4% compared to […]

Read the full article →
Thumbnail image for Experts claim market is good for expat mortgages

Experts claim market is good for expat mortgages

January 15, 2015 property

Expats paid in US dollars and currencies linked to the US dollar are sitting pretty when it comes to planning their 2015 property purchases in the UK and Europe, it is claimed. Over the last 12 months, as the US economy has recovered and the Eurozone slumped, currencies have moved to reflect these changes. For […]

Read the full article →
Thumbnail image for Mortgage bargains to be had in Europe, new index suggests

Mortgage bargains to be had in Europe, new index suggests

November 27, 2014 property

Would-be expats looking to move to popular destinations such as Spain and France can find some of the lowest mortgage deals ever available, according to new research. British buyers in particular can use the strength of the pound against both the Euro and the dollar to their advantage, according to the latest quarterly index from […]

Read the full article →
Thumbnail image for Expats faced with shifting home buying rules in the UAE

Expats faced with shifting home buying rules in the UAE

November 20, 2014 property

Expats buying a property in the United Arab Emirates are facing changes in terms of access to both available properties and finance. Sharjah is opening its property market to foreign investment for the first time and HSBC has said that it is reviewing its Abu Dhabi mortgage lending strategy for expats. Leases of up to […]

Read the full article →
Thumbnail image for More Brits consider moving abroad to make home ownership dream reality

More Brits consider moving abroad to make home ownership dream reality

October 28, 2014 Britain

People become expats for lots of reasons including work and a better lifestyle, but now it seems that the cost of property in the UK is emerging as a new reason for moving abroad. New research has found that a fifth of disillusioned house hunters would consider leaving the UK — and the United States […]

Read the full article →
Thumbnail image for British expats get landmark ruling on illegal property cases in Spain

British expats get landmark ruling on illegal property cases in Spain

October 7, 2014 property

British expats who bought homes in Spain and found themselves in the middle of an illegal home scam are closer to being able to own their properties legally. In a landmark case, a judge in Almeria has awarded €135,000 damages to three British families who bought illegal homes a decade ago in Albox, which might […]

Read the full article →
Thumbnail image for Expats buying more affordable property in the UK

Expats buying more affordable property in the UK

September 4, 2014 Britain

British expats are increasingly buying property in the UK, but they aren’t splashing out, with the most popular investments in the £55,000 to £70,000 range, research has found. According to Find UK Property, a company that specialises in finding properties for overseas investors, sales to British expats have increased by 60% in the first half […]

Read the full article →
Thumbnail image for Expats in Dubai struggling to buy property due to mortgage caps

Expats in Dubai struggling to buy property due to mortgage caps

August 22, 2014 Dubai

Developers in Dubai should consider reintroducing rent-to-own schemes as expats are struggling to afford to buy a property in the emirate, it is claimed. Such schemes were popular during the early 2000s when Dubai was establishing its own property marketplace. They helped those struggling to afford to buy amid stricter regulations designed to cool rising […]

Read the full article →
Thumbnail image for New range of mortgages for UK expats wanting buy/let opportunities

New range of mortgages for UK expats wanting buy/let opportunities

July 18, 2014 property

A new range of mortgages aimed at British expats who want to buy and let a property in parts of the UK has been launched. Skipton International is offering a maximum loan to a value of 75% on residential properties for buy-to-let, but the property must be purchased in England and Wales. Applicants will need […]

Read the full article →