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; request a free guide on NISAs from Hargreaves Lansdown

News
Kenny Ireland, pictured in 2010.
peopleActor, from House of Cards and Benidorm, was 68
News
A scene from the video shows students mock rioting
newsSchool leaver's YouTube video features staging of a playground gun massacre
Travel
travel
Environment
View from the Llanberis Track to the mountain lake Llyn
Du’r Arddu
environmentA large chunk of Mount Snowdon, in north Wales, is up for sale
PROMOTED VIDEO
Voices
A family sit and enjoy a quiet train journey
voicesForcing us to overhear dull phone conversations is an offensive act, says Simon Kelner
Arts and Entertainment
The cast of The Big Bang Theory in a still from the show
tvBig Bang Theory filming delayed by contract dispute over actors' pay
Sport
England celebrate a wicket for Moeen Ali
sportMoeen Ali stars with five wickets as Cook's men level India series
News
Morrissey pictured in 2013
people
Life and Style
The director of Wall-E Andrew Stanton with Angus MacLane's Lego model
gadgetsDesign made in Pixar animator’s spare time could get retail release
News
peopleGuitarist, who played with Aerosmith, Lou Reed and Alice Cooper among others, was 71
Travel
travel
News
Robyn Lawley
people
News
people
News
i100  ... he was into holy war way before it was on trend
Arts and Entertainment
High-flyer: Chris Pratt in 'Guardians of the Galaxy'
filmThe film is surprisingly witty, but could do with taking itself more seriously, says Geoffrey Macnab
News
people
Life and Style
food + drinkVegetarians enjoy food as much as anyone else, writes Susan Elkin
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

    1st Line Support Technician / Application Support

    £20000 - £24000 per annum: Harrington Starr: A leading provider of web based m...

    Team Secretary - (Client Development/Sales Team) - Wimbledon

    £28000 - £32000 per annum: Ashdown Group: Secretary (Sales Team Support) - Mat...

    Accountant / Assistant Management Accountant

    Competitive (DOE): Guru Careers: We are looking for an Assistant Management Ac...

    Senior Investment Accounting Change Manager

    £600 - £700 per day + competitive: Orgtel: Senior Investment Accounting Change...

    Day In a Page

    Save the tiger: Tiger, tiger burning less brightly as numbers plummet

    Tiger, tiger burning less brightly

    When William Blake wrote his famous poem there were probably more than 100,000 tigers in the wild. These days they probably number around 3,200
    A tale of two presidents: George W Bush downs his paintbrush to pen father’s life story

    A tale of two presidents

    George W Bush downs his paintbrush to pen father’s life story
    Save the tiger: The day America’s love of backyard tigers led to a horrific bloodbath

    The day America’s love of backyard tigers led to a horrific bloodbath

    With only six per cent of the US population of these amazing big cats held in zoos, the Zanesville incident in 2011 was inevitable
    Samuel Beckett's biographer reveals secrets of the writer's time as a French Resistance spy

    How Samuel Beckett became a French Resistance spy

    As this year's Samuel Beckett festival opens in Enniskillen, James Knowlson, recalls how the Irish writer risked his life for liberty and narrowly escaped capture by the Gestapo
    We will remember them: relatives still honour those who fought in the Great War

    We will remember them

    Relatives still honour those who fought in the Great War
    Star Wars Episode VII is being shot on film - and now Kodak is launching a last-ditch bid to keep celluloid alive

    Kodak's last-ditch bid to keep celluloid alive

    Director J J Abrams and a few digital refuseniks shoot movies on film. Simon Usborne wonders what the fuss is about
    Once stilted and melodramatic, Hollywood is giving acting in video games a makeover

    Acting in video games gets a makeover

    David Crookes meets two of the genre's most popular voices
    Could our smartphones soon be diagnosing diseases via Health Kit and Google Fit?

    Could smartphones soon be diagnosing diseases?

    Health Kit and Google Fit have been described as "the beginning of a health revolution"
    Ryanair has turned on the 'charm offensive' but can we learn to love the cut-price carrier again?

    Can we learn to love Ryanair again?

    Four recent travellers give their verdicts on the carrier's improved customer service
    Billionaire founder of Spanx launches range of jeans that offers

    Spanx launches range of jeans

    The jeans come in two styles, multiple cuts and three washes and will go on sale in the UK in October
    10 best over-ear headphones

    Aural pleasure: 10 best over-ear headphones

    Listen to your favourite tracks with this selection, offering everything from lambskin earmuffs to stainless steel
    Commonwealth Games 2014: David Millar ready to serve up gold for his beloved Scotland in the end

    Commonwealth Games

    David Millar ready to serve up gold for his beloved Scotland in the end
    UCI Mountain Bike World Cup 2014: Downhill all the way to the top for the Atherton siblings

    UCI Mountain Bike World Cup

    Downhill all the way to the top for the Atherton siblings
    Save the tiger: The animals bred for bones on China’s tiger farms

    The animals bred for bones on China’s tiger farms

    The big cats kept in captivity to perform for paying audiences and then, when dead, their bodies used to fortify wine
    A former custard factory, a Midlands bog and a Leeds cemetery all included in top 50 hidden spots in the UK

    A former custard factory, a Midlands bog and a Leeds cemetery

    Introducing the top 50 hidden spots in Britain