With the UK property market looking decidedly dodgy and the security of banks ever more precarious, is it any wonder people are looking overseas as a place to invest their money for the future? And how easy is it to do that or are we reaching back to the dark ages when people stashed any spare cash under the mattress?



France are fast becoming leaders in encouraging people to invest in property in their country by providing the leaseback property scheme. This allows people to make huge tax savings providing they are purchasing the property as a business, whether it be to let on the rental market or provide accommodation for students, the elderly or for business people.

But how easy is it to obtain a mortgage to invest in the leaseback property scheme? The French government are going out of their way to encourage people to invest in property in their country whilst easing their accommodation crisis. There are companies that have been specifically set up to assist with finding suitable leaseback property and can help through the entire process.

French mortgages work pretty much on the same principle as a UK mortgage but interest rates are distinctly lower, as low as 4.5%. They provide interest only, repayment, variable and fixed rate mortgages for leaseback property and if a fixed rate is chosen this can be for the length of the mortgage term, making it much easier to plan your budget.

The usual paperwork applies. A French mortgage provider would want to see evidence of income, savings and bank statements. For the self employed, a minimum of one year's accounts are necessary but once all they have all these details in their possession, a quick decision is forthcoming.

You can expect to be able to borrow up to seventy five per cent of the value of the property but, unlike British banks, they do like to ensure you can afford the repayments thus reducing the horrible event of repossession further down the line. The French banks will assess all your finances and they like to reassure themselves that no more than a third of your gross income is spent on things like mortgages and loans. If this is not the case, then the amount they are willing to lend is reduced accordingly.

You will need to set up a French bank account when purchasing a leaseback property. This is so that mortgage payments can be paid out and rental yield can be paid in. People have lost faith in the trustworthiness of banks recently but it hasn't helped that they have been so willing to lend to people who could ill afford the repayments. Advertising campaigns were launched to encourage everyone to borrow more and more and this, along with the rising cost of living in the UK, has led to many people losing their homes through repossession.

A mortgage acquired through a French bank does not pose the same risk as they do not advocate lending to people who cannot afford it. Add to this the fact that they want foreign investors to bring money into their country and you should be fairly secure in the way your finances will be handled. As with any project, research is the key. Any venture carries small risks, but with the right research and shopping around, you can avoid the most obvious of mistakes.