French property reform 'to avoid risky credit'

The conditions that led to the credit crunch will not be allowed to recur in France even as it seeks to extend home ownership, the country's finance minister Christine Lagarde has said.

Speaking about the future of property transactions in France, Ms Lagarde told the BBC: "Expect two conditions - a down payment of 20 per cent of the value of the house plus mortgage [repayments] which will not exceed 30per cent of income."

She added that there is already a good "safety net" in place and there is no sub-prime lending in France.

Those looking to invest in French property may decide it is a safer bet because of the cautious way its banks proceed, preventing the kind of problems seen elsewhere.

Anyone buying a home in France now is likely to get a more appropriate price than in the last few years when some vendors have tried to artificially inflate the figures they were asking for, the founder of French property specialist firm VEF Trish Mason wrote this week.