Haggling, insurance, leaks: Five updates for property owners in France

We look at where buyers are able to get better prices, where the cheapest insurance policies are – hint, it is not Paris – and a jail sentence for building a chalet illegally

We look at a court case involving a water leak, an illegal construction case, home insurance prices in Brittany and elsewhere and house price negotiations
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Where are buyers negotiating more in early 2022?

The difference between asking and selling price for property purchases is increasing in several areas of France as buyers gain more leverage due to a sales slowdown.

Overall in France, properties are selling for 2.5% cheaper than the initial value set by sellers and agencies in the first quarter of this year, the real estate network Orpi has announced. This is similar to the end of 2021.

But the rate is significantly higher in several areas.

For example, in Antibes in the south-east of the country (Côte d'Azur), properties are selling on average for 5.4% less than the initial asking price, compared to 1.9% in the previous quarter (end of 2021).

The difference between asking price and final selling price is also notable in Reims at 4.3%, compared to 1.2% at the end of last year and Vannes in Brittany, with the difference in asking / selling price at 3.7% at the start of this year compared to just 0.1% at the end of last year.

In Grenoble the difference is 4.5% (it was 4.3% at the end of 2021).

On the other end of the scale, those who bought in Montpellier at the start of this year most probably paid the asking price, with the difference only 0.2%.

You can see a full table listing the difference in average selling prices of properties compared to the asking price at this link here (in French).

Yann Jéhanno, the CEO of Laforêt real estate network in France gave his predictions for the year ahead last month in a wide-ranging interview with Figaro Immobilier, also reflecting on a record-breaking 2021 and giving his thoughts on the upcoming presidential election.

“The phenomenon that will mark the year 2022 is that of fair prices and the return of negotiations and haggling,” he said.

“Today, a perfect property is snapped up very quickly…but as soon as there is the slightest defect, we see haggling for better prices and buyers taking more time.

“And this should be a permanent trend.”

Read more: Prices, climate, scams: Five updates for property owners in France

Where does home insurance cost the most (and least) in France?

The annual average cost of home insurance (assurance habitation) in France was €216 in 2021, a recent study of 35,000 policies by insurance comparison site Assurland shows.

Brittany has the cheapest home insurance, while Paris has the most expensive.

This is due to a disparity in the number of insurance claims, with regions where burglaries or severe weather conditions – such as in the southeast of France – are more common.

Average cost of yearly home insurance by region, not including Corsica (+ difference compared to 2010):

  • Brittany: €171 (+18.75%)

  • Pays de la Loire: €179 (+19.33%)

  • Bourgogne-Franche-Comté: €188 (27.89%)

  • Normandy: €190 (+25%)

  • Grand Est: €193 (+31.29%)

  • Centre-Val de Loire: €197 (27.92%)

  • Nouvelle-Aquitaine: €204 (30.77%)

  • Auvergne-Rhône-Alpes: €205 (28.13%)

  • Hauts-de-France: €207 (30.19%)

  • Occitanie: €232 (40.61%)

  • Provence-Alpes-Côte d'Azur: €240 (33.33%)

  • Île-de-France: €242 (32.34%)

Olivier Moustacakis, co-founder of Assurland.com, stated:

“The increase in the number of properties being insured, the higher rate of burglaries and climatic events have led to a 33% increase overall in the home insurance premiums over the past ten years.”

He suggested that homeowners review their home insurance policies every 18 - 24 months.

Read more: How to insure and prove value of expensive items at your French home

The study also confirmed that, predictably, insuring a house is more expensive on average (€260 per year) than a flat (€180 per year).

It showed that 56% of people take out a basic insurance plan, compared to 44% who choose policies with additional elements, costing on average 20 to 25% more.

Read more: France’s ‘catastrophe naturelle’ insurance system: how to claim

Read more: Self-employed in France get new law to protect home if business fails

Old owner / new owner: Who is responsible for damage to neighbour’s property?

New owners of properties can be fully responsible for damage stemming from their property that is affecting neighbours even if the source of the damage began before they moved in, a new court ruling states.

This comes from a decision made on March 16 by France’s top appeal court, the Cour de cassation, which has jurisdiction over all civil and criminal matters.

It stated that if a neighbour complains about damage under the troubles anormaux de voisinage laws after the new owner has signed the acte de vente on the property, then it is the new owner that has full responsibility to fix the damage.

This particular case was contested by the new owner, who claimed that as a water leak began in the house before he moved in, the previous landlord should share responsibility for the repairs.

But the Cour de cassation ruled against this, as the complaint came after the new owner came into possession of the property.

It serves as a reminder to buyers to assess thoroughly damage to the property before they sign the acte de vente.

Read more: What can I do about my neighbour's noisy dog in France?

Read more: Neighbours are not liable for storm damage in France

Three months in prison for illegal chalet construction

A 37-year-old man has been sentenced to three months in prison for illegally building a 100-square-metre chalet on agricultural land.

A local court also gave the man three months to destroy the chalet, after which he will be fined €50 per day for each day it remains.

The harsh sentence, handed down on March 22, is due to the man’s poor attitude and also to serve as a message against illegal construction projects which have multiplied in the area in recent years, Le Parisien reports.

He built the chalet in a town in Essonne (Île-de-France) in 2019 to live in with his family, but chose to build it without planning permission on a plot of land defined an “agricultural zone without construction rights” by the Plan local d’urbanisme (local planning scheme).

Alain Lamour, the mayor of Longpont-sur-Orge where the chalet was built, tried several times to intervene in the construction of the chalet, which was put up in just two weeks.

He had a ‘stop construction’ order issued and even tried blocking off the road to the plot of land to prevent the trucks getting there.

Longpont-sur-Orge, just south of Paris with a population of around 6,500, has seen an influx of illegal constructions in the past couple of decades, Mr Lamour said.

There are currently around 100 cases ongoing investigating potentially illegal constructions, 30 of which pre-date 2010.

“The procedures are still long, but with this case we are sending a strong signal to the inhabitants: If you do not respect town planning rules, you will be firmly punished,” Mr Lamour told Le Parisien.

This particular case was delayed several times due to Covid and an error in the case.

Read more: France’s ‘garden shed tax’ is up 7% on last year

Mortgage rates less favourable this year compared to 2021

Mortgage rates in 2021 were exceptionally good for anyone looking to get on the property ladder, but that favourable trend is changing this year, creating problems for those on tighter budgets.

Mortgage broker company Cafpi said that the average rate given in 2021 was 0.77% over 10 years, 0.93% over 15 years, 1.1% over 20 years and 1.42% over 25 years.

Another broker, Pretto, says that just looking at April this year, mortgage rates are considerably higher. For example, potential buyers can get a 20-year mortgage at 1.44%, or a 25-year mortgage at 1.58%.

Simultaneously, the taux d'usure (the maximum rates at which households can borrow) is in the second quarter of this year very low. Due to the way it is calculated, which is based on figures that are not up-to-date with current mortgage rates, the taux d'usure is not accurately reflecting the current borrowing situation.

This, along with rising mortgage rates, makes it harder for the least well-off to get on the property ladder this year.

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