13th November 2008

Despite the current recession there are still UK people looking to start a gite business in France. For those with money, the dream is to buy a rambling old stone farmhouse, convert the many dependances into individual gites, and for the owner to live in the main house permanently to oversee things. For the less-affluent, what they seek is a buy-to-let mortgage, but not all French lenders will offer mortgages for this type of purchase because they see it as essentially a business venture. However, some do, taking future income from the business into account. They will, however, typically want at least 30% deposit up-front plus all legal costs, together with a business plan and projected income figures to work out the level of permitted borrowing.
If all this seems daunting in this climate, never fear. Help is at hand. Apparently, if you can find someone else to run the gite in your absence (e.g. an agent), while you continue working in the UK, the deposit requirement would be considerably reduced as the borrower would be deemed less reliant upon the gite income. And, because you would still be working, your UK income would be taken into account so raising the mortgage amount you could borrow.
Even non-married partners can secure a joint-mortgage in France - as can friends and colleagues - but to be able to use joint incomes as collateral, non-married partners must have secured a French pacs agreement. Friends, siblings or colleagues, however, would need to prove that they could afford to service the whole mortgage should the others default.
Still scary though!
Think I'll stay with what we've got. May not be much, but it's all ours - every euro's worth.

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