Great British invasion of France is a myth

Britons landing in large numbers on French soil and pushing up house prices has long been a complaint of locals in some parts of the country.

However, the accusations are unfounded says Daisy Ayliffe, writing for Expatica. Sure, she says, there is no shortage of Britons who don’t want to live in popular regions of France such as the Dordogne. But the ‘expat land grab’ is a myth.

"Brits out, stop speculation" was earlier this year daubed on the offices of a notary in Bourbriac who handles house purchases for UK buyers. The British press was quick to dub the town where the incident occurred as the 'village of hate'.

But the fact is the local house hunters are too quick to find a scapegoat for the soaring house prices. And not just in Brittany either.

For 20 years average prices across France have risen by around 5% but in recent years growth has exceeded this and 2004 saw average growth of 15%, followed by 10.9% last year.

With French estate agents reporting there is no habitable rural building left to buy for less than Eur 100,000 and analysts predicting up to 11% growth for this year it’s no wonder the finger of blame is being waved at second home buyers.

But Britons are not to blame, says Claudia Carrier-Hein, estate agent for Demeures et Propriétés du Sud Ouest. "British buyers all seem to be after homes near La Rochelle but it is the local families who are paying the price," she contests.

"British people are not stupid, they do not buy over priced houses. When I began working as an estate agent I was told Brits suffer 'coup de coeurs,' that they fall in love with properties and pay any price — but that is simply not the case," she notes

British families have been specialising in finding and rebuilding run down properties that others would not buy.

"British people have always tended to buy old ruins that no one wanted and they have added real value to them. It is not the case that a whole market shift can be attributed to Brits who pay above the odds for homes over here, " said Carrier-Hein.

Other varieties of expat buyers have arrived in much smaller numbers but, according to estate agents, are actually more likely to overbid for a property.

"The big price properties are not actually being bought by the English," Jean-Alain Corfa of Kermorvan Immobiliers in Brittany adds. "It is actually other nationalities who go for the top end of the market. I have many Swiss, Dutch, Japanese and American clients."

The housing boom that started in the 1990s—and which has only slowed but not stopped even today—is of course, not limited to France. Never before have so many countries experienced housing market ramp-ups at the same time.

The International Monetary Fund (IMF) say the strength, duration and ubiquity of the global boom is underpinned primarily by low interest rates.

As well as stable interest rates, the French government has encouraged investment in property with various schemes of which the leaseback is one. Government-run programmes have attracted larger numbers of French buyers into the market as well as foreign buyers.

Leaseback properties were introduced to increase the quantity of holiday accommodation in areas capable of attracting more tourists.

"The leaseback system is a scheme unique to France which enables you to afford your dream home and cover a lot or all of the mortgage repayments," Miranda John, international mortgage broker at Blevins Frank says.

"You will receive a guaranteed rental income, averaging between 3% and 6%, from a large holiday company who will rent out your property for 9 years, sometimes more. The other main advantage of this scheme is that when you originally buy your property, you don't have to pay VAT which represents a 19.6% saving."

Of course, Britons and expats from other counties too are participating in the phenomenon, aided by increased accessibility offered by low-cost airlines and airports.

New airports in Nîmes, Carcassonne and Toulouse have had an immediate impact on house prices in the area. "Our market report for 2006 points to a 21 percent increase in property prices close to low-cost airports," Trisha Mason of Vivre en France says.

The British love affair with France has not had only negative economic consequences, as tax officials in the Dordogne—which now runs English-language tax seminars—can attest.

"The French want tourists but they do not want any of the inevitable consequences," Carrier-Hein, argues. "UK buyers have propped up the local economy in rural areas of France. Brits tend to buy old properties and renovate them and that means using local French builders and architects. Britons are good for France’s rural economy. France cannot have its cake and eat it."