French property news: Our January 2022 round-up
From hemp-covered houses to affordable housing schemes and a green renovation grant…Our pick of recent news and updates for property owners and tenants
We look at France’s property news for January Pic: Arturs Budkevics / fizkes / create jobs 51 / Stockbym / Shutterstock
New home renovation scheme launches
The network promises to provide advice and assistance at each step of the way via a personal helper called Mon Accompagnateur Rénov’.
This revamp for 2022 comes in view of the growing success of the MaPrimeRenov' grant scheme, introduced in 2020, that helps homeowners improve energy-saving features such as insulation, ventilation and heating. This is now one of the benefits that can be applied through the new network.
There are also some changes to the rules for the MaPrimeRénov grant from this year.
Notably, to benefit, your home must now be at least 15 years old, as opposed to two (apart from grants to change an oil boiler to a more eco-friendly one), it is now for main homes occupied at least eight months a year (as opposed to six), and related work must now be done within two years instead of a year.
In another change, grants that were previously given by the Agence Nationale de l'Habitat (Anah) to finance energy renovation work for low-income households through its ‘Habiter Mieux Sérénité’ scheme are rebranded under as MaPrimeRénov’ Sérénité, with the aim of making the subsidy easier to understand and more accessible.
This subsidy enables large-scale work to be carried out, in one go, in older, badly-insulated homes, often described as passoires thermiques (thermal sieves). It can subsidise, for example, the installation of a new heating system, new insulation or the replacement of windows, doors or ventilation systems.
A new grant for low-income households is also now available, called prêt avance renovation, offered in partnership with several partner high street banks, on which families will only pay the interest on the loan and will repay the capital only when they sell or bequeath their renovated home.
In another boost to home renovation, the maximum ceiling for the interest-free eco-loan (éco-PTZ), also available from banks, has been raised from €30,000 to €50,000 this year.
Read more: What is France Rénov aid scheme?
New affordable housing project in Paris
Since January 4, the City of Paris has been offering housing units at €5,000 per square metre – half the market price – through the real solidarity lease (BRS) system (dispositif du bail réel solidaire).
The project is being managed by the Foncière de la Ville de Paris (FDVP), an agency offering social housing solutions in the capital.
Buyers of the new affordable units will only purchase the actual buildings, which they are entitled to for a period of 99 years. The land is still owned by the FDVP. It means that buyers will have to pay a fee of €2.50 per square metre every month to the FDVP as a rent on the land.
Non new-build houses selling quickly
Last year was marked by an explosion in sales of non-new build homes, particularly of more spacious properties located further from large city centres that offer quicker access to nature. This has also been fuelled by a huge uptake in people working from home.
Between October 1, 2020 and September 30, 2021, a record 1.2million non-new build homes were sold in France.
It came after a slower year for house sales in 2020, caused by difficulties linked to a series of lockdowns and other Covid-related restrictions.
A lot of the activity is in smaller towns or cities with access to Paris or other large cities, which is causing demand for houses in these areas to soar. However, as the supply has not increased, it is leading to higher property prices. This trend is likely to continue in 2022.
How will mortgage rates change in 2022?
Mortgage rates should remain favourable throughout 2022 according to Immobilier Danger, a site offering independent analysis and advice about the French property market.
It stated: “Rates have fallen in the first few days of January, following slight increases towards the end of 2021. The current financing conditions on the market are excellent and should remain so throughout the year.”
The average rate was 1.06% for loans in November last year (ranging from just 0.86% for a loan over 15 years to 1.13% for 25 years), according to the latest figures available from the Observatoire Crédit Logement, which publishes regular mortgage statistics.
‘Affordable rent’ scheme reviewed and simplified
An affordable rent scheme, called louer abordable, is being updated as of this month.
It allows landlords to rent out their properties at an affordable rate – below the market prices – while benefiting from a tax advantage on rental income.
This scheme has been in place for five years already but has now been updated and simplified. A landlord using this scheme will be able to get a 15% tax reduction if they agree to rent their property for 15% below market rates, or a 25% reduction to rent at 30% below market rates.
If the property is managed by an agency, then the tax reduction can be between 20% and 65%.
For more information, see the government site here.
Maximum rent prices to be added to adverts
Some properties in France are subject to ‘rent controls’ (encadrement des loyers). This prohibits landlords from setting rent prices above a certain amount.
A new law is set to come into effect from the beginning of this year that will mean these rent controls must be mentioned when a property subject to them is advertised for rent.
The rule was announced by housing minister Emmanuelle Wargon in October and was set to come into effect from the beginning of 2022.
According to a survey published in January 2021 by the consumer association CLCV, 40% of advertisements for housing in Paris did not do this.
Extension of interest-free loan until end of 2023
The prêt à taux zéro (PTZ) (interst-free loan) scheme will remain in place until at least the end of 2023, a law finalised at the end of December states.
The PTZ was set up to help people with lower incomes get on the property ladder. The loan can cover up to 40% of the purchase of a main residence, whether an old or new build. This depends on the area the property is in.
The PTZ is guaranteed for a period of 20 to 25 years, and, as its name suggests, comes with zero interest.
You can read more about the PTZ here, and find out if you are eligible.
Planning permission applications now possible online
Since January 1, it has been possible to apply for planning permission online.
The service includes all planning requests, including déclaration préalable for smaller projects, or requests to demolish or change a building.
Larger communes, of at least 3,500 inhabitants, will also have to process the application online.
The service is not centralised, although the state is offering several technical solutions to help. Mairies will have to offer a dedicated email address or an online contact form or specific website for the requests.
It is, however, still possible to apply on paper if you prefer.
Homes being insulated with hemp
Old houses are to be renovated with a moisture-resistant eco-material made from hemp, in the Hauts-de-France region.
Fifty of the 321 houses In the mining town of Pecquencourt (Nord) are to undergo this renovation, which will take place between now and June.
The buildings’ walls will be covered with a concrete made from hemp, which will increase insulation and prevent energy escaping. Some of the houses included in the project date back to 1846.
Eventually, it is hoped 115 of the town’s houses will be renovated with the material.
The hemp insulation project was launched in 2018 with the aim of renovating 20,000 homes in 10 years.
Paris’ offices remain unfilled
Demand for office space in Paris remains low despite a slight recovery. The amount of space being occupied is 20% below the average of the past 10 years, Le Figaro reports.
This is however an increase of 32% compared to 2020, when offices around the city all but completely emptied due to the pandemic and government orders to work from home.
This drop in demand is in line with what studies have been predicting.
Property market research organisation Institut de l’Epargne Immobilière et Foncière (IEIF) found last year that the number of workplaces required could fall by up to 27% if companies switch to two days of home working per week. Demand for office space would fall then by 14%, it noted.
The French government introduced an ‘obligatory’ work-from-home order on January 3, 2022 requiring all workers who can to remain at home at least three days per week. Since autumn 2021 working from home at least two days a week had been recommended but was not obligatory.