Don't be snow blind: Alpine homes have a summer value

French resorts are diversifying into the warmer months, allowing for greater rental income, reports Julian Knight

Hear anyone talk about the French Alps and your first thoughts are probably of the white stuff, snow, neige. Skiing and snowboarding, vin chaud and après ski is where it's at in the French Alps, yes?

No, not any more. According to the estate agent Savills, there has been a 26 per cent fall in Alpine ski tourism since 2007, as result, no doubt, of double dip recessions and financial crises. The region has had to adapt to survive – no longer reliant on a glut of tourists in a few short, not necessarily snow-bound, winter months to make their money for the year.

The French Alps is now a year-round destination and this is making its property – always a favourite with British buyers – potentially more lucrative. "The resorts used to be ghost towns in the summer, but now they buzz with holidaymakers. This provides the chance of higher rental returns," says Charles Weston Baker, the head of international residential sales at Savills.

With warmer summer months than the UK, but with lower rainfall and a cooling breeze, hiking, the most traditional of Alpine summer pastimes, has been joined by mountain biking and even the anglophile golf. And, once you add more extreme pursuits such as canyoning, paragliding and abseiling, it's easy to see why the Alps are beginning to carve a tourism niche beyond the snow.

"The Alps seems to appeal more to a younger demographic than in the past and is seen as a place for the family. That's one of the great joys of owning property, lending it to friends and family," adds Mr Weston Baker.

Property prices are still pegged to the prestige of ski resorts. Courchevel, Chamonix and the like, command some of the highest prices as do resorts over the Swiss border. Back in France, more affordable property locations – but still well established ski areas – include Morzine-Avoriaz, Meribel, Les Arc and Valmorel.

Located in Savoie, a couple of hours from Geneva airport, the village of Valmorel is next to the landmark Col de Madeleine and on a clear day Mount Blanc is visible. Club Med, one of France's biggest tourism companies, is selling 19 ski-in, ski-out chalet-apartments near to its all-inclusive resort.

The properties, which can be seen at villas-chalets.clubmed.com, start at ¤556,000 (£440,000) for two beds and go up to ¤1.3m for four beds. When in residence, owners can use the club facilities, including restaurants, bars, gym, spa and pool. It's a walkers heaven, with more than 150km of footpaths set in nearly 9,000 acres of protected countryside. Owners, like paying guests, even have the use of an onsite butler to cook breakfast and make the beds as part of the package.

The properties are available on a leaseback basis, so for the first 11 years of ownership the properties are let out by Club Med to high-end guests. In return, buyers receive a guaranteed rental return of 3 per cent and three weeks use a year.

"The idea is that owners can enjoy the privacy of their villa and dip into Club Med's all-inclusive facilities, which is ideal for families. This all-inclusive deal is a unique offering of this development," says Sylvie Ernoult, Club Med's head of villa marketing.

Leaseback has received some bad press and understandably so. Buyers have found to their cost that the guarantees are only worthwhile if the developer can follow through with its promises. After the financial crisis, large number of developers either went bust or were unable to deliver their guarantees. This wasn't just seen in Eastern Europe or less developed countries, France suffered its fair share of developer failure.

"There were problems with leaseback and people need to be alive to the risks that the guarantee is only a guarantee if the firm is strong enough to follow it through," says John Busby, a director at French Private Finance who specialises in French properties.

Big, it seems, is not only beautiful but necessary when considering buying on a leaseback basis. "Go with the big providers. The Club Med's and Pierre Vacances (P&V) of this world are massive, strong companies which should be well placed to honour their promises. Overall, people like leaseback in the Alps because it gives them the usage while the rental returns allow the investment to pay for itself," Mr Weston Baker adds.

At Club Med, for instance, the chalets are maintained for owners and materials are top drawer – essential in the often harsh Alpine environment.

There are also freehold properties available in the Alps – not tied into a leaseback arrangement – but these come at a premium as developers cannot claim the tax advantages that come with building property designed to be let out.

Savills, for instance, has just started marketing a six-apartment development in Meribel, with beautiful views over the valley and La Chapelle Notre Dame des Neiges. Ranging from two to four-beds, apartments cost from ¤720,000. P&V has a range of properties at a heady 2,000m altitude in Belle Plagne from ¤502,219, sold through athenaadvisors.co.uk.

Mortgages, although subject to quite strict criteria, are readily available in France, regardless of whether the property is bought leaseback or outright. "Mortgage rates are near record lows, with tracker products available from just 2.5 per cent and 20-year fixed rate deals at 3.75 per cent," says Mr Busby.

Generally, mortgage loan to values stand at 70 to 80 per cent. However, there is an affordability test applied to French mortgages and borrowers' total debt repayments cannot exceed a third of their income. But lenders do take account of potential rental income in their calculations.

"The best advice is to have the finance in place before you start looking. You don't want to be rejected once you have your heart set on a place. The good news is that prices are soft at the moment so serious buyers have the whip hand," Mr Busby says.

The buyers market, no doubt, is down to the euro's troubles. But buyers in France, rather than their counterparts in Spain, Italy or Greece, can be fairly sure of France's continuing place in the eurozone. British buyers have benefitted from the uncertainty because exchange rates have improved, but market jitters can strike the unwary buyer at any time.

"On average, it takes between six and eight weeks to complete a resale property purchase abroad. If you're buying off-plan this is generally elongated to 12 to 18 months. Even over just one month currency rates can change dramatically and have a real impact on the price of an overseas property," says Mark Bodega, a director at currency firm HiFX said.

One way to counter such fluctuations is to arrange a future currency contract, which allows you to buy the currency at current rates and pay after completing the purchase.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at VouchedFor.co.uk

PROMOTED VIDEO
Sport
ESPN footage showed a split-screen Murray’s partner Kim Sears and Berdych’s partner Ester Satorova 'sporting' their jewellery
tennis
Arts and Entertainment
Cold case: Aaron McCusker and Christopher Eccleston in ‘Fortitude’
tvReview: Sky Atlantic's ambitious new series Fortitude has begun with a feature-length special
Voices
Three people wearing masks depicting Ed Miliband, David Cameron and Nick Clegg
voicesPolitics is in the gutter – but there is an alternative, says Nigel Farage
Voices
The veterans Mark Hayward, Hugh Thompson and Sean Staines (back) with Grayson Perry (front left) and Evgeny Lebedev
charity appealMaverick artist Grayson Perry backs our campaign
News
i100
News
people
Sport
Chelsea manager Jose Mourinho
footballThe more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
Life and Style
Vote green: Benoit Berenger at The Duke of Cambridge in London's Islington
food + drinkBanishes thoughts of soggy school dinners and turn over a new leaf
News
Joel Grey (left) poses next to a poster featuring his character in the film
peopleActor Joel Grey comes out at 82
News
i100
News
business
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Compliance Assistant

    £13000 per annum: Recruitment Genius: This Pension Specialist was established ...

    Ashdown Group: Market Research Executive

    £23000 - £26000 per annum + Benefits: Ashdown Group: Market Research Executive...

    Recruitment Genius: Technical Report Writer

    £25000 - £35000 per annum: Recruitment Genius: A Technical Report Writer is re...

    MBDA UK Ltd: Indirect Procurement Category Manager

    Competitive salary & benefits!: MBDA UK Ltd: MBDA UK LTD Indirect Procurement...

    Day In a Page

    Isis hostage crisis: The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power

    Isis hostage crisis

    The prisoner swap has only one purpose for the militants - recognition its Islamic State exists and that foreign nations acknowledge its power, says Robert Fisk
    Missing salvage expert who found $50m of sunken treasure before disappearing, tracked down at last

    The runaway buccaneers and the ship full of gold

    Salvage expert Tommy Thompson found sunken treasure worth millions. Then he vanished... until now
    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Homeless Veterans appeal: ‘If you’re hard on the world you are hard on yourself’

    Maverick artist Grayson Perry backs our campaign
    Assisted Dying Bill: I want to be able to decide about my own death - I want to have control of my life

    Assisted Dying Bill: 'I want control of my life'

    This week the Assisted Dying Bill is debated in the Lords. Virginia Ironside, who has already made plans for her own self-deliverance, argues that it's time we allowed people a humane, compassionate death
    Move over, kale - cabbage is the new rising star

    Cabbage is king again

    Sophie Morris banishes thoughts of soggy school dinners and turns over a new leaf
    11 best winter skin treats

    Give your moisturiser a helping hand: 11 best winter skin treats

    Get an extra boost of nourishment from one of these hard-working products
    Paul Scholes column: The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him

    Paul Scholes column

    The more Jose Mourinho attempts to influence match officials, the more they are likely to ignore him
    Frank Warren column: No cigar, but pots of money: here come the Cubans

    Frank Warren's Ringside

    No cigar, but pots of money: here come the Cubans
    Isis hostage crisis: Militant group stands strong as its numerous enemies fail to find a common plan to defeat it

    Isis stands strong as its numerous enemies fail to find a common plan to defeat it

    The jihadis are being squeezed militarily and economically, but there is no sign of an implosion, says Patrick Cockburn
    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action

    Virtual reality: Seeing is believing

    Virtual reality thrusts viewers into the frontline of global events - and puts film-goers at the heart of the action
    Homeless Veterans appeal: MP says Coalition ‘not doing enough’

    Homeless Veterans appeal

    MP says Coalition ‘not doing enough’ to help
    Larry David, Steve Coogan and other comedians share stories of depression in new documentary

    Comedians share stories of depression

    The director of the new documentary, Kevin Pollak, tells Jessica Barrett how he got them to talk
    Has The Archers lost the plot with it's spicy storylines?

    Has The Archers lost the plot?

    A growing number of listeners are voicing their discontent over the rural soap's spicy storylines; so loudly that even the BBC's director-general seems worried, says Simon Kelner
    English Heritage adds 14 post-war office buildings to its protected lists

    14 office buildings added to protected lists

    Christopher Beanland explores the underrated appeal of these palaces of pen-pushing
    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Human skull discovery in Israel proves humans lived side-by-side with Neanderthals

    Scientists unearthed the cranial fragments from Manot Cave in West Galilee