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House prices in France

2006 has been another good year for French property prices, which have increased 7.3% on average (year to November, December figures not yet available). Although this is slower than previous years, and only about half the increase of UK property prices, it still represents a reasonable return on investment.

There are however increasing signs that prices are slowing down. In the last 3 months for which data is available (September, October, November) price increases were only 1%.

That being said, the French market continues to provide much better value than the UK market. The increases in France continue to be much less than the UK increases and consequently one could argue that the French market provides even better value for money than it did previously.

Sarkozy to affect house prices ?

France is set to become a country that is "much more property owner-oriented" now that Nicolas Sarkozy has become president, according to Penny Zoldan, managing director of Latitudes. She says that the centre-right politician who took over from Jacques Chirac on Wednesday will strengthen France's economy and property market.

According to Ms Zoldan, Mr Sarkozy's policies will probably cause property prices to rise as French investors become more confident.

However, as these changes will take some time to implement, British investors still have time to buy properties in time for the boom.

"If things become more beneficial for the French who have money ? and that's what the conservatives do ? then there will be more money around and the French will be even more in competition for the good properties," she commented.

Her comments echo similar sentiments expressed by property specialists VEF, which has said that the new French president will boost the country's economy and make the property market much "livelier".