Canal houses, mortgage rule changes: Five French property updates

Our weekly roundup of French real estate and property news, including a call to invest in old canal houses

There are updates on property energy performance ratings, lock houses, mortgages and social housing this week in France
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Call for people to renovate old canal lock houses

A project has been launched in Brittany to find people willing to revitalise old lock houses, buildings that traditionally served as accommodation for those in charge of canals or ricker locks.

The region of Brittany has, since 2008, been responsible for its 440km of public waterways, including the 156 lock houses and outbuildings that line the banks.

Some of these lock houses have fallen into disrepair due to them being used less often.

The region is hoping its new initiative can attract investors to do up the traditional buildings and turn them into viable tourism projects.

Applicants can be individuals, associations, companies, or even communities.

The selected candidates will only have to pay a small fee of around €2,000 per year, depending on its size, and will be allowed to live in the house, as long as they seek to create a tourism project with it.

This could be a B&B, a café, a bicycle shop, etc.

The region will remain the owners of the houses but investors will be charged with renovating the interior and keeping it in good shape.

The contracts on the houses, which will be temporary occupation agreements, can range from five years to 20 years, depending on the size of the investment.

The project to search for investors in these buildings is being run by the region of Brittany, the Redon Agglomération and the commune of Avessac, in partnership with the department of Loire-Atlantique.

Véronique Véron, who is in charge of public waterways for the region of Brittany, said the idea is not to attract people looking for cheap housing, but for those interested in developing the houses into viable tourism projects.

“Dreamers looking for cheap accommodation should not apply,” she said.

“The region is looking for solid economic projects with people who are willing to invest and even create jobs.

Those interested have until Monday, August 29,12:00 to submit an application.

This is the third time a call for investments into lock houses has been made, after similar initiatives in 2013 and 2015.

The end of endless mortgages

It is now no longer possible to get a mortgage with a bank with an unlimited duration in France.

The repayment period is now limited to a maximum of 25 years (with a few exceptions), in line with recommendations made by the Haut Conseil de stabilité financière (HCSF).

The new law came into effect on January 1.

The law is a precaution as the length of mortgages in France has been increasing.

As of November 2021 the average length was 20 years, compared to 18.9 in November 2018, figures from the Observatoire Crédit Logement CSA show.

In addition to the limitation on mortgage duration, the borrower’s monthly debt ratio can no longer exceed 35% – this means their expenditure, including the monthly mortgage repayment, cannot be more than 35% of their income.

These rules were already widely followed by banks, who had anticipated that the recommendations from the HCSF would become mandatory.

Record mortgage borrowing

Property owners in France borrowed over €252billion in mortgages in 2021 (figures counted up to November) from their banks, the highest since 2017, when €255billion was borrowed.

However, unlike 2017, the majority of these were new mortgages and not renegotiations.

In 2017, 43% of mortgages granted were in fact renegotiations of prior loans, meaning the total amount borrowed for new mortgages was €145billion.

In 2021, only 18% of mortgages granted were renegotiations, with the amount borrowed through new mortgages equalling around €207billion.

It shows that banks are still ready to give out mortgages, despite the new rules that came into force on January 1, as outlined above.

Sales of properties with good energy ratings up in Ile-de-France

The number of sales of properties with good energy performance ratings is increasing in Ile-de-France, figures from the Notaires du Grand Paris show.

The rating is shown in France by a Diagnostic de performance énergétique (DPE).

Old-build flats in the region with an energy performance rating of A or B now make up 5.8% of total sales, compared to 1.1% 10 years ago. Old-build houses with a rating of A or B now make up 3.2% of total sales, compared to 1.1% in 2011.

Old-build properties with a rating of C are proving to be the most popular, with flat sales up 6% in the past 10 years, and house sales up 6.9% in the same period.

Sales of old-builds with a ratings of D, E, F and G have all decreased in the past 10 years.

Social housing goal falls short

A total of 104,800 new social housing units were financed in France in 2021, figures from the Housing Ministry, published January 25, show.

This is 8% more than in 2020, but is still short of the government’s target of 120,000.

The ministry said there was a “particular concern” about the poor results in areas with the most competitive housing markets.

The government has set a target of financing 125,000 new units for 2022, including 45,000 destined for those most in need.

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