French bank lays out tougher mortgage requirements for Brits buying second homes

French bank lays out tougher mortgage requirements for Brits buying second homes
Photo: AFP
For British citizens wanting to buy a house in France, Brexit has brought in extra complications around visas and length of stay, but getting a mortgage to buy your dream home might also be getting tougher, as France-based mortgage broker Eddie Sammon explains.

For many people, buying a property in France to enjoy long holidays in is a long-nurtured dream and thousands do so every year.

For British buyers, Brexit has added a few complications – with the 90-day rule now meaning that second home owners must either limit the length of their visits or apply for a visa.

READ ALSO EXPLAINED: How to get a visitor visa for France

Despite this, plenty of people are still going ahead with purchases, looking ahead to a post-vaccine future when travel will again be possible.

But it seems that there may also be financial issues for Brits looking to buy second homes in France in the future.

We asked Eddie Sammon, a British mortgage broker living in France who specialises in the English-speaking market.

Have you noticed any changes in the market due to Brexit? 

Yes, firstly, there was a rush of Britons seeking mortgages in order to move to France before the end of the Brexit transition period (January 1st 2021). It is not necessary to own a house in order to establish residency in France, but many prefer to do so.

House purchase in France often takes approximately three months and I saw panic starting to creep in from Britons around September time, worried that their purchase would not complete before the January 1st.

By November, demand from UK citizens seemed to have reduced significantly as people realised that any new property purchases would be unlikely to complete before the end of the transition period, even though some managed to succeed in a two-month timeframe.

What about the start of 2021?

Now in January 2021, one of the main French banks for non-residents has contacted us with new, tougher post-Brexit criteria for UK residents.

What are the requirements?

For the bank in question, UK residents wishing to obtain a mortgage for a second home in France will have to be able to demonstrate that they satisfy the conditions to be classed as a high net-worth or high-income individual, unless they are purchasing their primary residence or a property which will be mostly rented out. UK citizens who are tax resident in France will not be affected.

To be classed as a high net-worth or high-income individual, you will need to earn at least £150,000 per year or have £500,000 in net-assets. For couples, this is required for each borrower.

If both potential borrowers do not meet the criteria then the only possibilities will be a mortgage for a primary residence or for a property which will be mostly rented out.

The bank has stated that they have introduced this criteria “in order to comply with new regulatory requirements in force in the United Kingdom”.

Is it just one bank that has said this?

So far, yes.

So will this affect the housing market in France?

From a business point of view, Brexit strengthens the need for our business to have a diverse client-base due to the drop in demand from Britons and the new tougher mortgage criteria.

UK residents currently make up a minority of our new mortgage enquiries and whilst we will always do our best for our UK resident clients, we are rapidly increasing our French mortgage offer to residents in France and across the world.

Eddie Sammon is a mortgage broker for Harrison Brook Mortgages (www.hbmortgages.fr). He moved to France from the UK three years ago and is regulated under HB Property SAS by the Autorité de Contrôle Prudentiel et de Résolution, part of the Banque de France.
 


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