This is an interesting problem

A picturesque Normandy village with a declining population is selling land for 1 euro (71 pence) per square metre in the hope of attracting new residents.

Champ-du-Boult, a community of only 388 people, a quarter of whom are British, has put four municipally owned plots of 900 to 1,000 square metres up for sale.

OK, that’s nice Lovely part of the world at least. And the Normans are very much better to live amongst than the French.

The cost of building a modest house would be about 1,300 euros per square metre of living space.

Hmm, maybe, a little high I would have thought. But right order of magnitude at least. But the problem is, why would you want to go and lose money in this manner?

The municipality has also put a stone house of 150 square metres on the market for only 55,000 euros (less than £40,000). It is the former residence of the headmaster of the village school, which closed three years ago.

You can get the house and the land for a quarter of the price of a new build. And this is a basic point about areas that are depopulating. I see it here in Northern Bohemia (and in the Algarve as well recently). It’s not just that a new build isn’t worth it but it can be entirely possible for a renovation not even to be worth it. There’s whole blocks of this town you can have for €1 a unit. Not worth it as the renovation costs would be more expensive than buying an already refurbed unit elsewhere in town.

This is just what happens with depopulation. Some part of the extant property base will have a negative value.

A Normandy cottage at €55k sounds great. Buying land and building one for €195k doesn’t sound so good when extant ones are going for that quarter of the price.

30 comments on “This is an interesting problem

  1. Tim there are miles and miles of premium real estate near downtown Detroit that they literally cannot give away. It’s beyond negative equity and approaching singularity density of negativity. Seeing the TV now, Baltimore is trying to emulate the great city as well.

  2. Where in the UK can you get a house for that price? Anywhere as nice as Normandy? Or is this just a sign that Normandy is, in fact, despite the tourist board propaganda, no better than Hull?

  3. Didn’t Stoke-on-Trent or Liverpool try this a few years ago, flogging houses for £1 on the condition that you had to renovate them and actually live in them?

  4. The cottage at 55k probably isn’t habitable, whereas your 195k will get you a new house with a bathroom, kitchen and suchlike modern fads. You’d need to compare to the price of something that’s either new-built or properly renovated.

    You’re probably still right that you’d be losing money on a new build, but probably not as much as the above calculations suggest.

  5. “With state grants being cut back,” Mr Madeleine said, “the only way to bring a bit more wealth into the community is to bring in new residents. It will make a huge difference if there are more people here paying taxes.”

    Apparently in France money only comes from two places: rich foreigners and the state. I’d wager that creating a more business-friendly legal and fiscal environment would also bring more wealth into the community. But that never occurs to the French.

  6. 55K€ seems exorbitant. My Breton place cost me 15. Better weather, too.
    But Richard, above, hits on a truth. The French do not have the Brit obsession with old houses. They let them fall down & live in something decent. Unless they can find a Brit mug to buy it & laugh their way to the bank.
    And that’s why I could buy my cottage in Brittany for 15K. Bought it off some Brits who’d paid 45 without realising what’s involved in doing up old French houses. I do & can do it to a budget. And then I’ll sell it to some Brits, next time the “place in France” fashion comes round. ( ͡° ͜ʖ ͡°)

  7. BiG,

    “Is this somewhere we can house our unproductive at lower cost to society?”

    You’d save billions on Housing Benefit if we just said “fine, you want to sit around and watch Jeremy Kyle and smoke fags all day? You can do that as well in Lincolnshire as London”.

  8. Where in the UK can you get a house for that price? Anywhere as nice as Normandy? Or is this just a sign that Normandy is, in fact, despite the tourist board propaganda

    Normandy is great, as is most of France. But what a lot of people don’t realise, rural in France often means really rural whereas rural in the UK means 30 mins from a large city and 10 mins from a direct train line to London. The principle difference between France and the UK is that France is much bigger and less densely populated, so once you head out into the countryside you don’t see much by way of population centres. I spent a week in Normandy last summer, it was great, and we spent a few nights in an old mill. It was in the absolute middle of nowhere, nearest town was a few miles away and that had a handful of shops. Nearest reasonably sized town was Caen, about 45 mins away. There are no end of very quaint old houses to buy in these regions for next to nothing, but they are remote and you’re normally not on mains water and there’s no internet (unless via satellite). On boxing day I went out to Compiègne which is an hour from Paris, 30 mins from Charles de Gaulle. I stuck my head in an estate agents and found 6-bed farmhouses for 120k Euros with acres of land. An hour from Paris. Problem is, they’re cold, in need of repair, and at the end of a 10 mile lane with the nearest shop being 5 miles away.

    So it’s not so much as houses in France are cheap, it’s just that Britain is so crowded and its housing market so fucked up that anything seems cheap. I recently bought an apartment in Annecy for less than you could find anywhere in the UK. And where in the UK is the equivalent of Annecy? Not only is the place nice with mountains and a lake, but it’s 30 mins drive from Geneva.

    When I think about it, the British are fucking insane to live with house prices so high.

  9. Apparently in France money only comes from two places: rich foreigners and the state. I’d wager that creating a more business-friendly legal and fiscal environment would also bring more wealth into the community. But that never occurs to the French.

    It depends where. A lot of people living in the Annecy region work in Geneva. Even then, the house prices are more reasonable than they are in Cardiff.

  10. With respect, Andrew, you don’t know Vire. The two main points of interest are the weekly market & a few scruffy vegetables (Tuesdays, maybe) & McDonalds. There is a great big green corrugated iron factory building, but I think that’s shut. Otherwise it’s mostly cows. And that’s the local metropolis. And from the village you have to go there.
    What do you do with agricultural areas when you don’t need many people to do agriculture?

  11. In Normandy there are plenty of villages called Bretteville and the like. These denote an earlier British mass immigration in the Dark Ages, presumably rather smaller than the one that went to Brittany. They were fleeing Germans and Gaels in those days.

  12. “When I think about it, the British are fucking insane to live with house prices so high.”

    Try the Swiss on for size. But that’s to do with their mortgage structures and the accompanying taxation structures, along with stupid-low interest rates.

    Am currently in the process of buying something super-cheap by Swiss standards, with a 58% mortgage, fixed for 5 years at 1.17%… (and fixed mortgages are cheaper than variable here. I can explain the logic and different set of assumptions to the UK/NL/FR if anyone cares enough)

  13. With respect, Andrew, you don’t know Vire.

    Yup, that was the closet railway station to the mill where I stayed. Your description is spot on.

  14. Am currently in the process of buying something super-cheap by Swiss standards, with a 58% mortgage, fixed for 5 years at 1.17%

    Jeez…mine’s fixed for the 10 year repayment period at 2.36%. I thought I was getting a good deal!

    Incidentally, Swiss house prices explains why a lot of Geneva workers choose to live over the border. That and (so people tell me) it’s more fun in France than Switzerland. 🙂

  15. @TimN
    ” But what a lot of people don’t realise, rural in France often means really rural whereas rural in the UK means 30 mins from a large city and 10 mins from a direct train line to London. ”
    And how. Lived in SW France, for a while. The village was 10km away. The shop at Carrefour was a 90km round trip to Villefranche. What we regarded as “local” was an area the size of South-east England.

  16. Once depopulation gets going it’s hard to stop. The closure of the school is a bad sign.
    (And having a quarter of your housing stock owned by Brits isn’t good either.)

  17. “Jeez…mine’s fixed for the 10 year repayment period at 2.36%. I thought I was getting a good deal!”

    SNB has negative interest rates…..

    The interesting thing is that as part of a fixed-rate deal you’re agreeing to pay all the interest over the period, irrespective (the only “out” is if you roll the same mortgage over onto another property, if you’re lucky). So if you exit early, you pay all the rest plus a nice little admin fee. Basically, the bank is pushing a chunk of risk onto the mortgage holder in exchange for a lower interest rate.

    At the end of the fixed period, you go over onto variable (which costs more but you can leave without penalty), re-negotiate, or remortgage with a different provider.

    And you typically never pay it off – depending on the bank, you normally have to amortise down to 40-60% of the initial purchase price (this drives the prices up).

    “Incidentally, Swiss house prices explains why a lot of Geneva workers choose to live over the border. That and (so people tell me) it’s more fun in France than Switzerland. :)”

    When someone proposed me something in Geneva, I said “I didn’t want to move to CH to live in FR…”

  18. Tim Newman

    Annecy, absolutely gorgeous! But Windermere is two hours away and we are where we are.

  19. The interesting thing is that as part of a fixed-rate deal you’re agreeing to pay all the interest over the period, irrespective

    Yup, mine’s the same. Which is why I chose the 10 year repayment period, to pay it back ASAP. If I am able to pay it off sooner, I’ll use the cash for something else instead.

  20. I would seriously buy one of these £1 houses they keep talking about if I could drive. Just saying.

  21. bloke (not) in spain,

    I agree there’s no easy way to repopulate rural areas which have no unique selling points. The quote just seemed like an interesting insight into the French way of thinking.

  22. “Yup, mine’s the same. Which is why I chose the 10 year repayment period, to pay it back ASAP. If I am able to pay it off sooner, I’ll use the cash for something else instead.”

    I’m likely going to be very un-Swiss and pay this off before going to live in it in retirement, rather than leaving a 50% mortgage on it. The interest dediction is not very interesting when it amounts to only about 30% of the theoretical rental value, which is taxed as income. If the rates go way up again, that changes the calculus, of course.

  23. I tried to buy a house near Vire about 15 years ago. Beautiful place. It was going for around £6,000 then and had a roof, water (1 tap in the kitchen) and even electricity (1 socket, next to the tap).

    What screwed it up was the French legal system; turned out as well as the people we were dealing with, there was another bunch of cousins who were co-owners and didn’t want to sell granny’s farmhouse to an Englishman. We gave up in the end.

  24. Re – The Stigler –

    “You’d save billions on Housing Benefit if we just said “fine, you want to sit around and watch Jeremy Kyle and smoke fags all day? You can do that as well in Lincolnshire as London”.

    But then the hyperbolic witches at the Grauniad will accuse you of “Ethnic cleansing” or some other bollocks…

  25. “But then the hyperbolic witches at the Grauniad will accuse you of “Ethnic cleansing” or some other bollocks…”

    Well, if you’re a Grauniadista it’s obvious as to why we should subsidise people who don’t work to live in the most expensive postcodes of the UK.

  26. @ Richard
    You’ve obviously never seen Vire in driving rain in February.

    “What screwed it up was the French legal system; turned out as well as the people we were dealing with, there was another bunch of cousins who were co-owners and didn’t want to sell granny’s farmhouse to an Englishman. ”

    Ah, yes. Inheritance law. Why there’s a perfectly good house, next door to my French family, been unoccupied for 10 years. Despite 2 of the daughters & the son all being desperate for somewhere to live. Because it was left to the father & 2 siblings jointly. And none of them can agree what to do with it. But it useful for chickens.

    ” Beautiful place. It was going for around £6,000 then and had a roof, water (1 tap in the kitchen) and even electricity (1 socket, next to the tap).”

    And my deep suspicion of all things French is telling me it didn’t have a working fosse (septic tank). And inadequate ground to site one? So it won’t conform to the revised french building codes which’ll apply to any new owner. And cost you a fortune to meet.
    (Unless, you have in your pocket a rather neat little technical solution has passed conformity in several departments. And which I keep very quiet about.)

  27. I read that Sarko partly solved the inheritance problem, by making it easier to force a sale without needing every co-owner to agree. But being French, no doubt it’s not that simple.

    I think it was OK for a septic tank; a couple of acres (more than we have in Dorset for ours), and it was 15 years ago. But thank you for the warning, useful if I try again.

  28. France is enormous. Normandy is enormous. I once drove through Normandy from the NE coast via Rouen (beautiful city) and then down what must have been an old roman road towards Le Mans. It took hours.

    Normandy must cover an area equal to a square from Gloucestershire to Essex, down to the coast and west to Dorset. If you like cows, move to Normandy.

  29. Johnnydub,

    “But then the hyperbolic witches at the Grauniad will accuse you of “Ethnic cleansing” or some other bollocks…”

    Well, yeah. You tell them to fuck off. Their tiny readership should be mostly ignored. Hopefully, the end of the Tories will have the silver lining of a new Conservative leader who will understand that these are a tiny minority, mostly dumb as fuck and will never vote for you.

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