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French property market "sheltered"

Article Date : Friday, August 10, 2007       Bookmark on Facebook   Bookmark on Del   Bookmark on Digg   Bookmark on Facebook   Bookmark on Reddit   Bookmark on Spurl   Bookmark on Furl   Bookmark on Yahoo   Bookmark on Magnolia   Bookmark on StumbleUpon   Bookmark on BlinkList

Experts assert that the French property market is by and large sheltered from the current US sub-prime crisis due to a stringent legal framework that will not allow sub-prime risks to penetrate.

Serge Grzybowski, chief executive of property development group Icade, argues that France is protected from this vulnerability as a result of the way in which its mortage system is set up, with banks tending not to lend excessively to mortgage borrowers.

In the US a combination of uncapped floating rate loans and relatively high lending in relation to disposable income leaves many borrowers susceptible to base rate fluctuations.

"Floating-rate loans are often capped in France and banks don't lend more than 33 per cent of an individual's disposable income," explained Mr Grzybowski to the French press, according to Forbes.

He continued to state that French property groups tend to have little exposure to "the more speculative property markets" or foreign property markets.

A spokesperson for Association Integration Kreizh Briezh maintains that UK property investors with an eye on the French market would stand to benefit from French language classes in order to make the process and transition easier.
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