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Tuesday, 11 July, 2000, 16:26 GMT 17:26 UK
Holiday homes boom
Fashionable French properties can carry a hefty price tag
British house hunters are scouring the French countryside for properties, lured by reasonable prices and the strong pound. But all that's about to change. For the first time in years prices are rising - just as the pound is weakening. The BBC's business reporter Rebecca Pike reports.

In one of the most sought-after areas of the Cote d'Azur, British businesswoman Genevieve Deblander is looking for a house. She has been trawling estate agents' brochures in a place known as the arriere pays - or hinterland.

But the rather gloomy name doesn't do justice to some of the most beautiful countryside in France.

Not to mention the beauty of towns like St Paul and Valponne, the Californian climate and the ease of getting there.

It takes an-hour-and-half's flight from London, then it's a 20-minute drive from Nice.

Ms Deblander: "There's nothing on the market"
When Ms Deblander first bought in the area three years ago it was easy. Now, though, properties are scarce and prices have just started to go up.

"There's almost nothing on the market," she said. "I just happened to buy at a very good time last time and now the market has really picked up. I expect that the economy is that much better and people are just buying again."

It's not just millionaires who were buying here. Across all price ranges the number of British people buying in France went up by 70% last year.

But as the French economy comes bouncing out of a long downturn, all that's about to change.

Malcolm Bruce-Jones is the international director of John Taylor estate agents, which has offices all over France, and in London.

Recently he's been getting letters and faxes from clients instructing him to put prices up by as much as one-fifth.

"The market has really started moving," he said. "We are on the cusp of it turning from a buyers' market to a sellers' market. Over the next two months, we will see a minimum of 10% to 20% increase in prices."

House prices are rising across France
A 30-minute drive down the coast, on the other side of Monaco, Jim and Jennifer Craigey are enjoying a long weekend in their new one-bedroom flat.

They bought it last year for 80,000 and they reckon it's now worth about 10% more. They bought at just the right time - when the pound was strong against the euro and when low European interest rates meant they got a good deal on a euro mortgage.

According to Mr Craigey, it enabled them to save around 20,000.

But there's little doubt they were lucky. For anyone thinking about buying now, the advice is to do so quickly, before prices go up too much.

It's also more important than ever to think about what kind of mortgage to get. In the past it may have made sense to get one in euros - because of the strength of the pound and relatively low European interest rates.

Cannes attracts many wealthy home-buyers
But not necessarily anymore, according to Eleanor Roberts, mortgage advisor at Abbey National France.

"Looking at the positive side, the main advantages are the low European rates; so for example the standard rate that we are offering at the moment starts at 5.25% or 5.7%.

"On the downside, you do have the currency fluctuations, so with the pound losing its strength, monthly payments may be going up slightly."

Buying in this part of France is pricier than other less fashionable areas, where you can get a farmhouse or a flat for a fraction of the price.

But it's popular for a reason.

For the thousands of British people who have bought here, the charms of the Cote d'Azur are simply unrivalled.

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 ON THIS STORY
The BBC's Rebecca Pike
"Properties are scarce and prices have just started to go up"
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