France

France has consistently been one of the most popular overseas investment destinations for Brits looking for property abroad, second only to Spain in terms of popularity in recent years.

Up to half a million Britons now own property and a slice of France.

Its consistent appeal has largely been based on its close proximity to the UK, range of attractive climates and a strong holiday rental market throughout large sections of the year.

Tourism

France is one of the most visited locations in the world.

The country received 79.1 million visitors in 2006, of which 13.6 million were from the UK – an increase of 3.1 per cent on the previous year, according to HomeWorldWide.co.uk.

A massive 89 per cent of French tourists also holiday in their own country as well, adding further demand to the holiday rental market.

This strong and growing tourist industry has created the potential for investors to secure high returns on their investments in several key areas.

Prices

However, prices for investment properties in France can vary dramatically and identifying suitable locations is imperative.

According to a survey by estate agent ERA Europe Limousin, Auvergne and Franche-Comté are the cheapest areas of the country in terms of price.

In contrast, the most expensive regions include Ile de France – which includes Paris – Provence, Alpes-Côte-d'Azur and Languedoc Roussillon.

The organisation found the average property price in France was €2,581 per m2 at the end of 2006.

Western France was the most attractive region, according to ERA Europe, with prices averaging around €2,030 per m2 while in the north and east of the country this falls to €1,850 m2.

According to the French National Institute of Statistics prices across the country "have been multiplied by two since 1998".

Buying

There are no limits to the foreign ownership of real estate in France, but the system can sometimes be complex - for example, there are different rules governing the purchase of a freehold and a vineyard.

The appointment of a notary is a prerequisite during the buying process, costing around three per cent of the sale price, and a ten per cent deposit will also be required.

Transfer tax can cost over seven per cent of the sale price, while estate agent fees can be nearer ten per cent.

Capital gains on the sale of property will also be charged at 16 per cent.

However, both the cost and complexity of this could now be changing.

The election of Nicolas Sarkozy has imbued the country with a desire to liberalise some of the bureaucratic excesses of the 'old' France.

This could simplified and accelerate the process of securing property in the country.

"For anybody talking about seriously investing, France will become a lot more interesting, but people have to start to make a move now," said Trisha Mason, managing director of French property specialists VEF.

One example of this trend is the raising of inheritance tax thresholds by the French government in recent months, making proposition more attractive to domestic and international investors.