Foreign Perspectives

Archive for the ‘Relocating’ Category

I used to think that there was a limit as to how bad an accountant could be. After all, they’re members of professional organisations which aim to keep standards high and strike off those who fall too far below the accepted norm.

Perhaps that’s true elsewhere in the world, but not in France.

Our “accountant”, for want of a better word, still hasn’t finished the 2006 accounts despite telling us just about every month since April that they’d be ready “next week”. We gave them a couple of weeks, called and were told that they needed just one more piece of information to complete them.

Once supplied, by magic another piece of information was now missing.

We were even told last week that the accounts would absolutely definitely be completed by Monday. Yup, one more piece is missing. Just one this time: a single cheque.

So, we’re off to see them tomorrow.

Unless you’re a “house person” or an “apartment person” there are many factors that you need to take into account in making the apartment/house decision.

Is this going to be your home or are you buying it for an investment is perhaps the most important question. On the whole, investment properties are generally assumed to require apartments rather than houses in that they’re usually aimed at a transient population who don’t want the hassle of looking after a garden. This isn’t always the case though and in areas where there is rapid price inflation of property which isn’t accompanied by a similar rise in salaries then you could be better looking at houses as families often find themselves priced out of the market in such circumstances. This is good for property investors in that you get a more stable base of rental clients than is typical in most areas.

That paragraph provides the first part of the answer for you too. If your stay is likely to be of a short duration such as for a university course or for a short-term contract then clearly apartments are the way to go. That avoids all the hassle of looking after the surroundings of a house and yet you can still get lovely surroundings in some of the apartment developments.

Have you any children or planning to have them? If they’re fairly young, usually it’s best to be looking at a house in that they’re usually larger in comparable circumstances. Of course, that extra size means more initial expense. For example, in the estate which we bought our property the two bedroom houses are around 15% more expensive than the two bedroom apartments.

Rent or purchase? If your move is temporary then rental is the way to go and that will usually push you towards apartments as there are usually more apartments for rent than houses in most areas.

Purchasing implies a longer term stay but if you are moving into an area distant from where you currently live you can find yourself with a choice between a rental apartment in an ideal area or a house purchase into a less than perfect area. If this applies to you and you need to move relatively quickly the thing to do is to rent the apartment in the ideal area first and make your purchase when a suitable property appears on the market. Despite what people think, you don’t need to move directly from one permanent home to another.

City or country? Whilst you get both houses and apartments in cities, you usually only get houses in the country. Therefore if you hope to live in the country, whether it be miles from anywhere or in a small village, then you will almost certainly have to choose to live in a house.

That’s just a brief overview of some of the main deciders; I’m sure that you can add to that list!

For those interested in France and perhaps thinking of buying a house in France at some point there are really only two property exhibitions that are worth considering which are the French Property Show in September and the Vive la France exhibition (now called The France Show) in January.

Anyone at all serious about property purchase in France should know of both of these or else they’ve been hiding out of reach of any France related publication. I had thought they were both so well known that there wouldn’t be any need to explicit advertising for either of them other than the mentions that both get in the numerous France property magazines.

And yet, they DO advertise, seemingly quite extensively. Why?

Well, my guess is that the punters were a little thin on the ground at the last exhibition in January 2007 as they certainly were very thin on the ground in France: we had no housebuyers staying with us at all during 2006. So, the organisers have hit the panic button this time to avoid any repetition.

Ironically, the housebuyers seem to be reappearing of their own accord so it’s probably going to be one of the most packed France exhibitions seen for some time. Of course, this just goes to show that people treat the Vive la France advertising more as a note of somewhere to go if they’re serious about buying than as something which puts them into a buying frame of mind. For really serious purchases such as for houses, advertising doesn’t change opinions a whole lot.

When you look around in a new country you generally bring all your preconceptions as to what a bank is with you.

Typically, the assumption is that a financial organisation is a bank if it issues credit cards, debit cards and cheque books whereas it’s a building society if it largely confines itself to savings accounts and mortgages. Of course, in many countries such distinctions don’t exist 100% of the time and there’s usually something of a graduated scale between building society and bank in most countries these days.

In fact, a more realistic distinction these days is probably based on size (however that might be measured) and perhaps the extent of international activities. So, for example, although most people would call the likes of the Halifax in the UK a building society in fact in both legal and practical terms it has been a bank for many years. For example, it has been issuing cheque books since the 1970s if not before and has had international activities for a substantial time too.

On the other hand, the various Credit Agricoles in France are clearly in the building society camp. Yes, they issue cheque books but their debit cards aren’t run by themselves and their international activities are nil, at least as far as the regional Credit Agricoles go.

Spain by contrast has the fairly substantial La Caixa which is a savings bank in name only although with few international activities up to now.

Not so long ago there were all kinds of restrictions on transferring money abroad due to currency controls that lots of countries had in place. They’re almost all gone now and it has become more of a natural thing for “ordinary people” to need to transfer money abroad.

Most of the time it’s due to holidays, of course, but an increasing number of us are becoming small scale international jet setters with homes in more than one country and with both of those come a need to transfer money abroad.

Holidays usually involve a different category of currency conversion in that you are on the spot when you need the money, the amounts involved are smaller and you probably don’t have a local bank account. However, whilst the amounts may be smaller individually, added up over the years they will come to quite a hefty sum. Also, many of those who holiday in the same country each year may be considering the purchase of a property there and so have that local account too.

Most people ignore the costs of all those international transactions to their detriment. One friend of mine found that almost 10% of his entire salary was going in such bank charges simply because he was living abroad and using his “home” account in exactly the same way that he always had ie lifting small amounts frequently.

Saving money on those transactions is usually fairly easy. If you don’t want to change your bank, check out exactly how they charge for use of credit, debit and cash cards abroad. You will usually find that debit and cash cards are more economic ways of getting cash than credit cards are in that you won’t be paying interest on the money. However, that’s not to say that they are cheap. Typically a withdrawal of £100 in the local currency will cost you £4 to £5 but note that this includes a fixed transaction charge so withdrawing £20 will cost you around £2 ie 10% whereas £200 would be about £7 ie 3.5%. You can eliminate these charges altogether if you use the UKs Nationwide Flexaccount as it has neither transaction fees nor foreign exchange charges.

It’s slightly better if you buy things, usually. Using a typical Mastercard or Visa card will only incur the foreign exchange charge ie buying £100 of goods will cost you £2.75 and that £20 item would be 70p. Therefore you should buy things with the card directly rather than lifting the cash to pay for them.

What about larger amounts ie if you’re living abroad or have a holiday home abroad? Well, if you follow our advice and get the Nationwide Flexaccount you can lift £500 per day which means that it’s quite viable to use that card in conjunction with a local bank account to transfer amounts equivalent to several thousand pounds. You certainly couldn’t buy a house in that way but it’s enough to fund the payments for electicity bills and the like.

If you are talking thousands, then the usual way is to ask your bank to do a SWIFT transfer. This will cost around £25 plus there’s a currency exchange charge (which isn’t widely available). However, that too can be eliminated in some circumstances. For example, if you bank with HSBC then you can do free transfers to an HSBC account elsewhere in the world but the HSBC Premier account that you need to avail of this costs £20/month (unless you have £50,000 or more on deposit with them) so it’s not as useful as it first appears. However, if you are buying in Spain, the Halifax run to a free account which offers free transfers from Halifax UK accounts to Halifax Spain ones. What’s less obvious is that this route gives you a pretty much free way from pounds sterling to euros anywhere in Europe as banks are required to transfer euros at the same level of charges in other European countries as they do domestically ie to get euros in an account in France, you could transfer from the Halifax UK to Halifax Spain and from there to a French bank.

Other options include the use of the specialised money transfer services such as HiFX (there are lots of similar services around.