Paris is a city where demand outstrips supply for the resale and rental markets. A well-located property will not stay on the market for long and rental apartments are usually snapped up within a few days if not 24 hours. Resale apartment prices have risen steadily since 1998 at an average of 10% annually.

Throughout France, the British represent 50% of foreign investors. However, in Paris they represent only 10.5% behind the Italians and Americans. People who have looked at investing in other areas of France may find Paris relatively expensive. But by London standards prices are still competitive and a £150,000 placement can bring respectable yields in the French capital.

According to the Ile-de-France Notary association, the percentage of foreign buyers in Paris (department 75) was 8.2% in the first half of 2006.

Certain areas are saturated by foreign investors such as the 4th district encompassing the Marais and Notre Dame, a tourist hotspot where 24.3% of investors were not French. This was followed by the 6th district, home of Saint Germain des Près (17.9%), the 1st district where the Louvre Museum is situated (17.3%) and the 7th district with Paris’ most famous landmark, the Eiffel Tower (15.8%).

The highest yields for residential property in Paris are made from studios and studettes (small studios) which are usually very small in terms of square metres. Buy-to-let Most properties in Paris are let out on one to three-year leases. Short-term lettings are, however, extremely lucrative, and if the property is well positioned, the potential yields are very attractive.

For long-term lets, studios attract students and young professionals. Many UK investors may be wary of letting to students, but it is worth remembering that French students are culturally very different from their British counterparts. Moreover, rental agencies require that rental payments are guaranteed by a third party, which is usually the tenant’s employer or parents, which removes the concern of unpaid rents. For short-term lets, studios attract tourists and corporate clients. For this group, apartments can be let on a weekly or monthly basis at a premium.

The large majority of apartment blocks have co-ownership committees and a management company in place.

When using a rental company, it is possible to ask them to attend AGMs on your behalf and to inform you of any works that are being discussed.

Looking at the minutes of previous meetings before purchase will uncover any works that are pending, and a structural survey is always advisable, although not legally necessary. Finance Lending laws in France are changing to allow people to borrow more. Previously, French banks would not allow repayments of more than 33% of a purchaser’s income, but many are now allowing repayments of a maximum of 40% of earnings. Payback periods are also increasing and are now up to 30 years.

Emily Akerman is an independent property finder based in Paris. Tel +33 155 906413, see www.tricoloreproperty.com, or email contact@tricoloreproperty.com