The Discreet Charm Of A House In France
One rainy day last December, Gary Batty was watching television at home in Doncaster in the North of England when he saw an advertisement by a real estate agency specializing in French properties. Batty, a 34-year-old driving instructor, was intrigued by the ad, which showed a three-bedroom house with a bar on the ground floor in the village of Tournissan, near Carcassonne in the Languedoc region of southwestern France. The price: only $82,000. Batty and his wife hopped a $28 round-trip Ryanair (RYAAY ) flight to Carcassonne for a weekend. "We realized it was the opportunity of a lifetime," Batty recalls. They sold their Doncaster house, pocketing $116,000, and moved last May to Tournissan, where they plan to make a living as barkeeps.
Buyers like the Battys are helping set France's property market on fire. Foreigners, mainly British, bought $10.3 billion worth of French property last year, accounting for about 15% of home sales outside major cities. Sure, the rich have their Riviera villas, and Provence has long attracted expatriates. But prices elsewhere in France remained modest, with houses as recently as 2002 averaging a little over $100,000 in regions such as Languedoc, Burgundy, and Normandy, less than half the figure in Provence. That, along with low interest rates and Britain's overheated market, put a house in France within reach of many middle-class Britons. They can take out a home-equity loan to buy a vacation property -- or just cash out and move to France.
Adding to the traditional lures of France is a more modern amenity: Ryanair and easyJet Airline Co. now offer inexpensive flights from London to more than a half-dozen cities across France's southern tier, from Nice to Carcassonne and Perpignan. "It has become cheaper for British customers to come to France for the weekend than to take a train to Wales," says Anna Stoloff, a real estate agent in Languedoc who specializes in sales to British customers.
Mortgages are no problem, either. Britain's Abbey National PLC (ANB ) has a French division that has specialized in home loans to expats since 1994. It made nearly $300 million worth of such loans last year. France's biggest bank, BNP Paribas, is in negotiations to buy the unit.
Could this love affair end badly? House prices in France zoomed up 16.4% in 2003, well above the 10% increase in Britain, according to the Bank for International Settlements. Many French, spooked by global stock market gyrations, are also investing in property. So far, French policymakers have said little publicly about the trend -- but that could change. Spain's central bank warned of a housing bubble after prices there rose 17.3% in 2003.
Some experts say the market is starting to cool, as bargains grow scarcer. Sébastien Duquesne, who heads the international buyers' unit at Abbey National France, says the bank expects its total loan volume this year to be about the same as in 2003. "This market has reached its maturity," he says.
But the siren song of la belle France hasn't faded for Richard Pullen, an ex-investment banker who settled in the Languedoc hamlet of Autignac with his lawyer wife and two children. "We seemed to spend all our time racing between picking children up from school, rushing to work, and rushing out again," Pullen says of their old life. Last year, after selling their London house, the Pullens bought a place in Autignac for $165,000. Their bed-and-breakfast opens soon.
Likewise, the Battys are happy with their new life, though they arrived speaking little French and had to clear several bureaucratic hurdles to reopen the bar. But the business already has its regulars, including the local pétanque club, and Mrs. Batty shares her private stash of English tea bags with favored customers. Seems as if the Anglo-Saxons are in France to stay.
By Carol Matlack, with Rachel Tiplady, in Paris