Will France lose its appeal for Brits due to difficulties in getting finance?
Spain has always been our top country for Brits buying overseas. A lot has to do with the weather and frequency of flights from most UK regional airports but France has still been a popular alternative but that could soon change if you need a mortgage to buy the property.
French lending criteria has always been cautious with strict and new rules which came into effect on 1stJanuary make it a little harder. Mortgage terms are now restricted to a maximum of 25 years and debt to income calculation capped at 35%.
Low interest rates make the margins for the banks very low and with strict controls on APR it limits the arrangement fees banks can charge. While this sounds good for customers it can make it not profitable for the banks to offer mortgages to non-residents getting a happy medium can be difficult to achieve
This week one of the largest French banks BNP Paribas has started the process of closing down there non-resident mortgage divisions as it’s no longer profitable, it will be closed completely by the summer once the current case load has been processed.
The impact of the closure of BNP isn’t good news for Brits looking to buy in France as they were one of the major lenders in the market and narrows the options for anyone looking for a French mortgage.
For some it could mean that they now need to find higher deposits as banks reduce their loan to values, some banks have brought in high minimum loan amounts which means on lower priced properties you may noy be able to get a mortgage and for some people the strict criteria may mean their only option to buy in France is to pay cash
If you are looking to buy a property in Spain, France, Portugal, Turkey or USA and need a mortgage email mark@vci-network.com for the latest criteria
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Blog : What will buying a home in Spain in 2022 look like?
