Eurostar commuters enjoy coffee, and a lower cost of living
Financial Times 16.11.07 by Daniel Thomas
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The merits of living in some of the further-flung parts of Kent or Essex to secure good house prices in leafy commuter belts are well known, but now another town can be included within that golden circle of a one- hour trip to London: Calais.
Not everyone's idea of a picturesque seaside town, admittedly, but it now marks Eurostar's high-speed boundary for people who consider an hour into King's Cross a very acceptable commute.
Beyond lies Paris, little more than two hours away, and a host of other French destinations that offer British workers cheaper residential property and the Gallic way of life. Lille, at 80 minutes away, is now as close as Canterbury.
HiFX, the foreign exchange provider, says the improved Eurostar service, which launched this week, has already fuelled increased interest in buying French property.
The number of property inquiries received increased by 17 per cent between August and September, according to HiFX and VEF Pas de Calais, a French property agent that specialises in British buyers.
"We've noticed a particular rise in the number of people who perhaps spend two or three days a week working in the UK and the rest of the time living in permanent homes in France," says Peter Wheelton of VEF Pas de Calais.
"We expect the Eurostar to encourage professionals to buy where they like spending time," adds Miranda John, international manager at Savills Private Finance. "Increasingly, workers are moving to three days a week in the City, then working from home or in an office in their residential country."
She points out that house prices are much lower in France, with even prime property in Paris noticeably cheaper than equivalents in London. Lille, she says, is still good value, and offers additional prospects as an investment given its large student population.
According to VEF, property prices are around 30 per cent lower than in the UK, a figure that is supported by Notaires de France, the organisation that represents French notaries.
Hubert Emmanuel Flusin, a Parisian "notaire" - the public officer who effectively replaces a solicitor in the French system - says that cheaper property is the main reason for the British to buy houses in France.
Notaires de France says about 60 per cent of overseas buyers in France are from the UK. The average property purchased by the British ranges from £167,293 in Paris to £154,681 in other areas.
Property in France can also be expected to rise in value although, as in the UK, price growth is slowing.
The Notaires-Insee index for the second half of 2007 said that prices were rising by between 7 and 9 per cent, depending on the area.
Another report said last week that growth in most cities had slowed considerably but that Lille and Paris were outperforming the rest, with capital appreciation of 6 and 8 per cent respectively.
There are potentially higher costs, however. UK residents can expect to pay around 7 per cent of the house's cost in additional fees, including stamp duty, transfer costs and notary fees, while sellers face a 16 per cent capital gains tax - more if they're French residents - as well as wealth tax for larger houses.
You will be deemed a French resident if your main home is in France, according to Flusin, and you live there for more than 90 days. UK earnings should remain taxed in the UK, but French-derived income will be taxed at between 20 and 40 per cent. A tax expert should be consulted before any move.
Also, the cost of Eurostar itself is not inconsiderable. There is a frequent traveller service that provides benefits, although not on price and there is no equivalent of a season ticket. Return tickets start at £59.
Even so, Simon Conn, managing director at Conti Financial Services, the overseas mortgage specialists, says the Eurostar's new timetable can only further the trend for British workers to buy in France to live, as well as looking at other parts of Europe for investments.
"We are already finding people buying in places convenient for the hop back to the UK for work purposes," says Conn. "Areas such as Brittany and Normandy are already popular with British workers who commute daily or weekly."
Conn adds that the interest rate, which is 1.75 percentage points below the UK's, makes euro-denominated mortgages attractive.
So, given the French way of life, lower costs and the international nature of people's working lives, the Euro-commuter looks set to continue to break down borders. And now you can have an extra 20 minutes for a café au lait in the morning.
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