French Mortgage News: End-of-Year Market Report and Forecast
Merry Christmas season! As 2023 draws to a close, it leaves behind a (insert your thoughts here) year. What’s on the horizon for the French mortgage market in 2024?
This past year, France experienced a sharp rise in mortgage rates, escalating from a fixed 2.80% over 20 years to an average of 5.20%. French banks also tightened their lending policies significantly, making for a difficult year.
On a positive note, higher rates often lead to lower property prices. Negotiating a 15% price reduction can balance out a 1% rate increase. This shift has created a market favourable to buyers, particularly those with substantial deposits. Our High Net Worth clients typically opted for mortgages with 50% Loan-To-Value (LTV) or lower, aiming to minimize interest costs while leveraging tax benefits and maintaining their investment portfolios. In contrast, the French Alps market remained robust, with slight price increases, thanks to buyers less reliant on mortgages.
Praz sur Arly Cret du Midi
Regarding inflation, the UK saw a substantial drop, leading to reduced mortgage rates. However, the situation in France differed; despite a reduction in inflation over nine months, mortgage rates continued to rise, indicating a distinct difference from the UK market.
Looking ahead to 2024, experts anticipate a decrease in mortgage rates starting from the second quarter, though this remains speculative.
Significant news includes one of our primary lending partners acquiring a well-known banking group, potentially enhancing their offerings in the non-resident mortgage market. Stay tuned for updates on new product availability.
LTV Update: We now offer up to 85% LTV for repayment mortgages, with terms extending up to 25 years. A 30% minimum deposit is advisable, including fees, and some additional cash investment with the bank can be beneficial. Typically, LTVs range from 70% to 80%.
Rates Update: Recently, mortgage rates have risen, currently ranging from 5% to 6% for a fixed 20-year term. The updated rates table below provides more details. Further increases are expected throughout the year, with rates only being secured upon issuance of a mortgage offer.
