Changes in French money lending attitudes are expected to boost interest in the leaseback market amongst UK investors.

Several French lenders have announced they will be offering a new 100 percent mortgage product, with additional finance to cover the cost of stamp duty and taxes, which can be up to 8 percent of the property value.

And according to French mortgage specialist, Athena Mortgages, loans are now available on a new build French leaseback property for 104 percent - on both a repayment basis, from 2.4 percent, and interest-only basis from three percent.

French banks will finance up to 108 percent for a renovated leaseback at the same rates.

Some banks have also increased the amount they will lend by 15 percent on certain French leaseback developments.

International investors have often struggled to secure leaseback properties in the face of stiff competition for apartments from their French counterparts, who have the added incentive of the Loi Scellier, a tax break from the French government that allows a portion of the value of the property to be offset against income tax liability.

This new mortgage offering is expected to boost interest in the leaseback market amongst UK investors.

Athena director John Busby said: “This higher level of loan to value means there is very little money to transfer to France to complete the purchase.

“The developers I have spoken to expect demand for their leaseback properties to increase dramatically over the next few weeks as news of these finance products filters out.”

• The Spanish property market correction will run into 2012, with prices down by 30 percent in total, say ratings agents Fitch.

Spanish property prices haven’t fallen enough, according to the experts. “Fitch believes that Spanish house prices remain over-valued relative to income thresholds and need to decline further to improve affordability dynamics,” says Rui Pereira, managing director and head of Fitch’s Spanish Structure Finance in Madrid.

“The supply overhang of unsold homes, more pro-active sales strategies by financial institutions and reduced credit availability are also expected to weigh on Spanish home prices over the near-term.”

Fitch question official figures showing that prices have fallen just 11.2 percent since the first quarter of 2008, pointing to a drop in transactions of 48 percent between 2006 and 2009.

And they argue that sales that do go through happen at prices well below the government index.

Fitch use affordability measures, house price long-term equilibrium and the imbalances of demand and supply to judge the current price of property in Spain.

At the height of the boom, the affordability ratio peaked at 7.7 years (cost of property/gross household income), up from 3.9 years in the years 1995-2000.

For sustainable affordability ratios of around five years, prices need to fall by 30 percent from the peak.

Fitch expects prices of holiday homes on the coast to fall the most.

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