Property market given boost by Interest rate cut

Following the decision of both the Bank of England and the European Central Bank to cut interest rates by 0.5%, many house buyers looking to buy property in France are in a healthier position now to purchase than they were before with confidence in the market increasing.

Nathalie Turchet of MGM French properties welcomes the interest rate cut, saying “lower mortgage repayments means more disposable income, equity releasing becomes more accessible and we consequently expect an increase in activity.”

As UK buyers receive more competitive rates for their loans this will provide stronger incentive to purchase in France. If you obtain finance for a purchase direct from a French bank you will now find it cheaper to borrow money. “This will open up the French property market further, as many house buyers are in a better position now to make a purchase than they were before interest rates were cut," commented Rajesh Agrawal, CEO of exchange rate company RationalFX.

The most immediate effect for UK homeowners considering a French purchase is that for those on tracker rates here, reduced lower monthly payments will instantly increase affordability with French lenders.

Jo Cowling, one of IPF’s French Mortgage consultants said, “lenders in France have recently been improving the terms offered to non-resident individuals, in contrast to the reduction in products and terms that have been made here. Given these factors, we are cautiously optimistic about the prospects for the French property markets in the future.”