Foreign Perspectives

Archive for the ‘Society’ Category

We’re looked at French housing, but what about your house in the UK?

Even if you are absolutely certain that you are going to spend the rest of your life in France, it’s best to retain your house in the UK if you can so that you have a fall-back position in case things don’t work out in France or you change your mind about living here. Not everyone is able to maintain houses in two countries of course and it will probably make finances a little tighter in France than they would otherwise be. However, once you sell your house in the UK you can find it very difficult to get back into the housing market. In our own case, our UK house went up over 40% in less than three years and effectively beyond our reach had we sold it when we moved.

If you are lucky enough to be able to keep it, you should try to rent it out. Not only will this keep the house occupied but it will help pay the mortgage etc. without needing to rely on income from France to pay for the various bills that will arise in the UK.

If you are going down the rental route, you will almost certainly need to change your mortgage to a buy to let one as few normal residential mortgages allow you to rent out your property easily. Your house insurance also needs to change to reflect the fact that you will have tenants in the house and that it may be unoccupied for extended periods of time between tenants (don’t rely on 100% occupancy!).

Although you could try to find tenants yourself, it’s much simpler to arrange the rentals through a letting agency as they can arrange for work to be done and to inspect the house before during and after each tenancy. This service usually costs around 10% of the rental income plus advertising costs of around 100 in advance of each tenancy.

Costs will continue during periods that you don’t have tenants. For instance, you are still liable for aspects of the electricity, gas and water bills. Throughout your ownership you also need to pay council tax / rates and, of course, insurance.

It’s difficult to be definitive about this decision. Keeping a house in the UK does entail a lot of costs from insurance to mortgage not to mention the additional effort that you need to put into managing your house (even if you have a letting agent). However, selling can be quite a permanent thing to do if you live in an area where prices move quickly and, to my mind, it’s best to retain your house as a fall-back should things in France not work out as you expect.

If you do decide that selling is the best option for you, it’s best to get this in motion before you leave the UK as otherwise you could find yourself liable for French capital gains tax on the proceeds of any sale.

Separately, but related to this topic, is the issue of maintaining a UK postal address. This is one thing that is definitely advantageous to do. If you can change the address for several credit cards to that of a friend or family member before you go, this will effectively move your credit history to their address which we have found to be very useful over the years.

Next week, we move onto French banking.

In many ways, the house buying process in France is quite similar to that in the UK but there are important differences.

Once you’ve found a place, the first stage is to sign a Promis d’Achat (promise to buy). If the seller accepts this, then you have your house as they aren’t allowed to even show it to anyone else (ie no gazumping), subject to you following through with the later stages of the purchase, of course. Signing this commits you to buy the place at the agreed price but only commits the seller to sell to you if they accept this contract.

Since it commits you to buying, you MUST add a “subject to mortgage” clause if you plan on getting a mortgage for the purchase. The mortgage clause needs to include the bank that will be giving you the mortgage, the rate and the term of the mortgage so if you are hoping to get a French mortgage you’ll need to see the bank first. If you haven’t done so already, you should open a French bank account at this stage (links to the various banks are in the Foreign Perspectives directory) During the next two weeks or so the notary will draw up the Compris d’Achat which is the sale contract and will come with an inventory of what’s included in the price and a completion date for the sale. You need to pay a deposit of 10% (sometimes 5%) to the notary at this point. Although you and the seller can use the same notary, it’s best to have your own one (this doesn’t cost any extra as the notaries split the fees). Read the inventory very carefully as what is understood to be included in France is very different to what is understood in the UK. For instance, you can be left with bare wires where light fittings used to be and even gaps where there used to be doors.

On the completion date, you go along to the office of the sellers notary and sign for the property. You need to sign every single page of the contract so allow an hour or perhaps two to do this. Once completed, the property and everything in it is yours. Unlike in the UK, everything you find within the property at that point belongs to you which sometimes includes the likes of unwashed dishes in the sink but can also include furniture and the like eg in our case we acquired a very nice desk valued at 9,000‚€!

Once the sale is completed, the estate agent will arrange to have the electricity, phone, etc. transferred into your name. If you are buying a commercial property (eg B&B) you must be registered with the Chambre of Commerce before these can be transferred into your name.

Seeing as SuperFrenchie thinks I’m “just” anti-French, I thought I’d redress the balance a little and point out one area where the UK is anti-European too.

I was in getting my driving license renewed last week which is something of a hit and miss affair as the explanatory leaflet leaves a LOT to be desired in clarity. Even though the thing was in English and, one would assume therefore that I’d understand it, the opening paragraph on what proof of ID was required was totally incomprehensible and appeared to be totally wrong too.

It opens by saying that if you have a colour photograph on your existing driving license then you don’t need to have someone certify your photograph nor to present a passport. Except, that when my father presented his renewal application complete with his old driving license with colour photo, they wouldn’t renew it without his passport.

It then goes on to say that you always need to have your photo certified yet they happily renewed mine with only my passport.

Then it says “digital photographs are not acceptable” yet they DO accept them, mainly because all of the photobooth machines only produce digital photos these days.

The best bit is perhaps their definition of residency. Despite living in France for three years, I still qualify for a Northern Ireland driving license as, according to their definition, I am still resident there!

However, none of that’s anti-European….

Whilst we were there, one of the increasing number of Polish immigrants arrived to exchange his license for a Northern Ireland one. In theory, he doesn’t actually need to change it at all but the lady in the office reckoned that he had to change it within six months (anti-European point 1). He presented his Polish ID card. Not acceptable: we need a passport (anti-European point 2) which isn’t actually what it says on their website. What she said he needed was to have his photo certified by someone in Northern Ireland who knew him for two years.

Emmm, so he MUST change his driving license within six months and, because you won’t take his valid ID card, he must find someone in Northern Ireland who knew him 18 months before he arrived?

Although Bayrou appears to be in third place, the peculiarities of the two stage electoral process in France mean that he’s the candidate with the greatest potential majority in the second stage, assuming that he gets through the first stage of course. It seems that the candidates in France have had a similar analysis of the voting possibilities to our own and are adjusting their approaches accordingly.

As reported in the Financial Times, this has already had a considerable impact on socialist thinking with an unsigned manifesto in Le Point calling for quite a radical rethinking of socialist policies. In effect, this would represent the realignment of socialism in France that happened with socialism elsewhere in Europe some years ago. Will that realignment happen this time around? I suspect not as there seems very little time before the election now and I can’t really see such a change being one that the electorate would believe.

To an outsider Sarkozy doesn’t seem to need that radical shift in ideology required by Segolene in that he runs what appears to be a very modern party with equally up to date policies. A few weeks ago I thought that his approach would be a little too radical for France at this time but apparently not if the polls are to believed. It does seem though that it’s now even more important that he aims to knock Bayrou out of the race at this point.

What about Bayrou in all this? In many ways it seems as though he is likely to win not so much as a positive statement by the electorate but rather as a vote against the other two candidates which is, of course, exactly what happened last time around when Chriac came up against Le Pen in the second round. The difference this time around is that Bayrou seems to be a realistic possibility in the eyes of the electorate and perhaps we will be referring to him as President Bayrou in just a few months time. If they’re lucky perhaps he will even deliver that “third way” that the French often seem so keen on having but have never quite managed.