Why France keeps booming on the property front

When Nicolas Sarkozy became French president earlier this year, he had more than just bricks and mortar on his mind. His was a policy programme geared up to wholesale economic restructuring in order to transform the fortunes of the French economy.

Of course, French property had a major part to play in that, just as Margaret Thatcher (the politician Mr Sarkozy is most often compared with) saw the extension of home ownership as a significant component of her own economic liberalisation of Britain.

To this end, new laws have been passed or are being passed concerning France property, as the president seeks to raise the proportion of homeowners among the French population. This in turn improves the prospects for UK buyers, who can take advantage of these laws.

While the parallel in policy may seem like a French attempt to catch up with Britain 25 years later, there are already some similarities in the property market situations of the two countries which are relevant to buy-to-let and other investors.

Firstly, vefuk.com has stated, there is the issue of supply. Just as Britain's affordability crisis has been partly attributed to the inadequacy of availability, so France has consistently found itself with fewer properties than it needs, a figure the website puts presently at 400,000. In France, as elsewhere, the demand is growing as household sizes shrink and more people seek to live alone.

At the same time, the website suggests, there are crucial differences. One of them is that obtaining sub-prime mortgages is harder to do in France under the credit policies of its lenders, so the kind of crisis that happened in the US and some have argued could happen in Britain is far less of a risk across the channel. Another factor is that when other aspects of the economy are in trouble, such as the stock market, property is seen as a safe bet. Given that Mr Sarkozy has a large challenge in trying to overcome vested interests to implement his economic policies, the economic weaknesses in the French economy may not change for some time, so keeping property in this exalted position.

Thus the overall economic difficulties experienced across the English Channel may turn to the advantage of investors. But this does not mean investors can always take their time. Homesworldwide.co.uk noted that there is presently a boom in the area of properties worth up to €200,000 (£139,000), according to overseas buying agency VEF. The website advised that UK investors should move quickly here. The reason for the trend has everything to do with one of the first new laws to encourage home ownership, that of allowing home-buyers to offset their mortgages against tax. It is a move, the site states, which has stimulated the lower end of the market and means demand will increase rapidly.

With the French property market holding so many aces, it may well perform well even if the overall French economy continues to lag behind. But investors will need to react to changing circumstances. As well as new incentives which raise demand, changes include improvements in transport infrastructure, which will open up many areas in a new way.

Ben Sanders, a spokesman for property portal French-property.com, said one such development involved the latest link to the Languedoc region, which includes a large part of the Cote D'Azur: "There is a new rail link schedule to be in place there by 2008. It'll be linked right up to Paris, so you can just hop on the Eurostar in the UK and be in the south of France in just five hours," he stated.

In many ways the French property market is just like the Eurostar. It moves quickly, new means are being created to extend access to it and it involves ideas shared on both sides of the channel.

Both, it might be added, offer exciting excursions into France for investors.

Jim Barnaby is a real estate investment broker and successful property investment adviser delivering research and selected UK and overseas property investment solutions with experience in spanish properties, french property investment, German property, Cyprus holiday homes, Property in Cape Verde, German property investment, cape verde property buy to let property