Renovating property in France has long been popular with Brits seeking to restore dilapidated buildings into the type of rural retreat that turns friends and families back in the UK green with envy. We've all seen 'before' and 'after' pictures which depict the amazing transformation of a pile of rubble in the French countryside to a magnificent stone house, and watched television programmes where even the most clueless of couples have somehow managed to manufacture their dream home from a cow shed. But don't be fooled into thinking that within a year of purchasing a ruin you will definitely be sipping wine outside a fully restored traditional French home surrounded by rolling countryside. Renovating is a gamble, and in most instances, a very costly one.

Count the costs
One of the factors that first drew British attention towards the hundreds of neglected farm houses, barns and various other buildings dotted around rural France, was that they were cheap – even up until three or four years ago a fairly decent property for renovation purposes could have been purchased for as little as £10,000–£20,000. However, prices across the Channel have now risen by so much, that for a similar property today you would need to part with closer to £50,000. Although to some £50,000 may not seem that much money – in the UK you'd probably be lucky if you could afford a timeshare in a tent for that amount – it is vital to remember that on top of this you then have to factor in the cost of actually restoring the property, which is often an impossible task to judge. Writes David Hampshire in Buying a Home in France, "Bear in mind renovation or modernisation costs will invariably be higher than you imagined or planned! Taking on too large a task in terms of restoration is a common mistake among foreign buyers in all price ranges." This is a point Mario Klucznuk of Vendeé-based firm MK Developments agrees with. "Renovating is expensive, not to mention hard work", he says. "On average, I would say restoring a property is about 50 per cent more costly than buying new build. "As a rule of thumb you should budget to pay around £1,500 for each square metre of your property that needs renovating, so if your property has a living space of 150 square metres and you need to carry out a full restoration, you are looking at an additional £175,000 on top of what you paid for the property", he adds. Of course how much your project will ultimately cost depends on how much work actually needs to be done to it. However, underestimating the required workload seems to be an all to common occurrence for most Brits. "Too many British people are led blind when they purchase a French property in need of restoration", says Klucznuk. "In my opinion it is essential that a buyer has the property they are interested in purchasing looked at by a SARL (Société à responsabilité limitée) registered builder or company before they sign their compromis du vente (agreement to sell)." Failure to do so, says Klucznuk, could be fatal to your renovation dreams. "Purchasers will be told that there are a few loose tiles on the roof and that's all", he continues. "But when it comes to dealing with them the tiles will actually be rotten and the entire roof will need replacing. "A few weeks ago someone asked me to look at a property they were going through the process of purchasing. They were told that the renovation would cost them about 250,000 euros to complete. Upon inspection of the property I could see that they had been severely underquoted and that the final total would in fact be closer to 750,000 euros. "I pleaded with them to pull out of the sale but they had already signed the compromis so were stuck with the property."

Hampshire also urges caution when it comes to taking what you are told by some agents at face value. "When a property is described as 'habitable', you should be prepared to ask a lot of questions and ensure that it means exactly what you need it to mean", he warns. "A building sold as 'requiring renovation' in France is usually in need of substantial reconstruction work. "'Partly renovated' usually means that part of a building is habitable, which means it at least has sanitation, but the rest is usually in dire need of restoration."

Gutted
Juliet Grimm is just one of many Brits to have bought an old property in France only to find out first hand that the path to the perfect renovation can run far from smoothly. In 2003, Grimm and her partner Andy decided to buy an old, and barely habitable, property in the village of Fenoillet between Perpignan and Carcassonne in the Pyrennees, because "Andy is a builder and we wanted an old stone house of character with a garden. They are like gold dust!"
However, two years and a lot of money later, the couple are still waiting to move into the home. "At first Andy was going to do the entire renovation himself, but after 18 months we realised that the project was too big for us alone so we brought in an architect and builder and ended up gutting the house completely", she explains. "The whole process is very, very slow and the project is inevitably escalating in price as we discover the various problems of renovating a very old stone house built on a hill with no foundations!"

The couple have also experienced problems with the weather – another factor anyone who plans to tackle a restoration project will need to take into account, especially if they have bought the property as a permanent home and need to move in by a certain date. "We have just experienced the worst winter in years, so much snow that the builders couldn't really work from mid-January to mid-March", Grimm continues. "The estimated time to complete the project was eight months. They have already been at it for six months and it is not even 25 per cent finished yet. In fact, we will be lucky if we are in by Christmas."
While, for many people, this would be a cue to take a swipe at the laziness of the builders, Grimm has nothing but praise for those working on the project. "The builders are very reliable", she says.

This is not the first time Juliet and Andy have renovated a property – while they wait for work on their Fenoillet property to be completed they are currently living in a cottage on which they carried out all the renovation work themselves. "Doing the work yourself", says Klucznuk, "is one way of keeping the cost down. However, you must know what you are doing. "I have seen no end of of British people who have come to France with all good intentions of restoring their properties but have done things wrong and ended up paying twice as much as they would have done had they used professionals in the first place." According to Klucznuk, the main problem for would-be British DIY experts is the difference in house construction across the Channel. Whereas most British homes are built using brick, in France the material of choice is stone.

Worth the work?
With all the scope for things to go wrong when renovating, it is perhaps no surprise to find that in the past few years there has been a big increase in the number of new properties being snapped up by British buyers. An Abbey National report released last year revealed that it has become 143 per cent more popular to buy new properties in the last three years. However, it is still sales of old properties that fuel the French market – the same research revealed that rural properties accounted for 81 per cent of the house sales between March and August 2004.

So why do so many Brits still gamble on renovating a wreck when it is more affordable and safer to buy a recently built home? "If renovated correctly, old properties are beautiful", answers Klucznuk. "Even French people, who have largely ignored older properties in the past are now starting to restore suitable properties, simply because they've seen how nice these relics can be made. "Also, with property prices in France continuing to rise, there is now a good chance that such properties can be sold for a profit if done up well. This is another reason such properties have started to appeal to the French." But warns Klucznuk: "If you are not 100 per cent confident about renovating, buy new build. With new properties the plumbing, electric, etcetera is all included and you get a ten-year guarantee. Whether they have the charm of an old property is another question."

So while it may be possible for you to turn a pile of bricks and mortar seemingly left to decay in the French countryside into your dream home, at all times you should remember that there is considerable hard work and expense to go through before you will be able to show your friends and family those fabled 'before' and 'after' pictures. With this in mind, be sure to prepare for many long months of hard graft. As Grimm says: "We're still to find out if we are pleased with the final results of our renovation and how far over our initial budget will go. But one thing's for certain: we will never tackle such a huge project again!"

When it comes to financing your renovation dream you are left with two real options, says overseas mortgage advisor Ben Maher of Conti Financial Services.

1. Raise the funds against equity on a UK property
This gives you more control over the monthly repayments as the loan would be in the same currency as your income, although rates in the UK are higher than Euro mortgages. The amount that can be borrowed will be based on UK equity, not the French property (this could be an advantage or a disadvantage dependent on the applicant's circumstances in the UK). The client will be able to carry out the renovation work themselves should they choose. Unless the client took a 'flexible' mortgage, it is likely that the full amount would need to be drawn at once, rather than in stages as and when required.
 
2. Raise the funds with a French lender using the property in France in security n The monthly repayments would seem to fluctuate as a result of exchange rate variation, although rates are lower than the UK (typically approximately 3.5%). In fact, there is a generally lower currency exchange risk than borrowing in sterling, as the property and the loan will be in the same currency, meaning that exchange rate changes will affect the 'real value' of the loan and the property equally.
 
Banks will consider lending up to a maximum of 40 per cent of the original purchase price towards the renovation costs. Any work will need to be undertaken by French registered builders. To finance the work on this basis, the property would need to be habitable at the outset (electricity, water, sewage facilities in place). The bank wouldn't fund renovation of a 'ruin'. Funds could be released in stages, on sight of the invoices for completed activities.

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Article first published in May 2005