France: Tuned in to the long-range forecast

Mountainous areas under 1,500m are suffering from increasingly unpredictable snowfall. Graham Norwood finds out how French resorts and developers are rising to the challenge

here has probably never been a better time to buy a ski property across the Channel – access to French ski resorts is cheap and easy via budget airlines and increasingly popular ski trains leaving from London's new Eurostar terminal.

But this year more than ever, all eyes are on snowfall. In other words, is 2008 going to provide another sign that global warming is changing the nature of the ski season?

The French Snow Research Centre says a forecast 1.8C rise in temperatures would shorten French annual snow cover above 1,500m from 170 days to 135. Some other scientists paint a still bleaker picture. The UN environment programme suggests rising temperatures are already pushing snowlines up in the Alps.

The truth is that developers can no longer guarantee long ski-seasons at resorts built below about 1,500 metres in France or indeed elsewhere in Europe. So buyers have to go high enough to make sure there is snow, or at least must check to see if there are enough other activities to satisfy themselves and potential renters of their home.

Older properties in both the main French ski areas – Rhône-Alpes and the Midi-Pyrenees – are not always expensive but are predominantly at between 500 and 1,500 metres. That used to be the typical height of modern resorts, too, until recently. But luckily, developers and resort managers are responding rapidly and now build either at higher levels or provide links between low-altitude resorts and higher slopes.

For example, Alpine Homes has launched Le Centaure Residences & Spa, a 52-apartment scheme at Belle Plagne, which at 2,050 metres is France's third highest resort. The full scheme is leaseback (see box), so it offers guaranteed rental income to buyers.

Belle Plagne is located in Paradiski, a new ski location created in 2003 by linking two high altitude resorts – Les Arcs and La Plagne – by the Vanoise Express high-speed cable car.

"Last season's freak high temperatures have resulted in an increasing demand for high altitude properties. Belle Plagne not only has virtually guaranteed season-long snow, it has access to three peaks over 3,000metres" explains Jeremy Rollason of Savills, the estate agency selling the apartments in the UK.

A few kilometres away, the modern Alpine village Arc 1950, built at 2,000 metres and with panoramic views of Mont Blanc and surrounding mountains, has been completed in the past year.

It now has 800 chalets and apartments, a thermal spa, outdoor swimming pools and shops, restaurants and cafés. Developer Intrawest emphasises the car-free squares and use of natural materials to build properties in the vernacular Savoie architecture marks this out from most modern resorts – and it has guaranteed snow, to boot. Erna Low Properties markets apartments at Arc 1950 from £125,000 to over £850,000. Some of these will be leaseback apartments.

Others are following suit. The popular French ski developer MGM Properties, for example, now builds exclusively at above 2,000 metres and has transformed its older, lower-level resorts by installing other sporting facilities. "Now there's climbing, walking and biking on the hills too," says a spokeswoman.

"Every skier wants to be in a snow-sure resort but the prices can be too high for many. We shouldn't be too hasty to cast aside the resorts at lower altitudes. Many of these villages actually have superb links into the higher resorts and are busier in the summer and spring months, so receive better all-year round rental occupancy," says Bertie Sanderson, a director of Erna Low Properties.

A good example of this is the beautiful St Martin de Belleville at 1,400m which links directly into the Three Valleys. Again Erna Low has apartments here from £300,000 – predictably high prices for one of the few villages in the region to maintain its traditional appearance. But there is a modern lift system allowing villagers to explore the higher slopes of Méribel, Val Thorens, les Menuires and Courchevel with ease

Not long ago, buying a French ski chalet was easy: see the first snow and you knew it was a good location. It's still possible to make a sound purchase – just aim high.

Alpine Homes: (020-7016 3740; www.alpinehomesintl.com)

Erna Low: (020-7590 1624; www.ernalowproperty.co.uk)

MGM Properties: (020-7494 0706; www.mgmfrenchproperties.com)

Leaseback schemes

The traditional French property market offers poor pickings to investors as it is expensive to buy into, tightly regulated and highly taxed. But leaseback schemes, introduced by the French Government to encourage more "beds" for ski tourists, offers investors good returns.

In these schemes, almost always blocks of apartments, buyers are obliged to "lease back" their homes to the developers, or an approved management company, to let out on their behalf. Two lease options are available to most buyers:

1. Lease with rental income

* The buyer does not pay the usual 19.6 per cent VAT on the property

* There is an annual rental income, often quite small – typically 4 per cent of purchase price – for the duration of the leaseback deal (typically 11 years)

* The buyer can use the property for a short time, often off-peak

* Buyers must pay a service charge plus the taxe foncière for local council services

2. Lease with price reduction

* The developer reduces purchase price to the equivalent of the rental income in the leaseback period

* The owner can use the property for a short time, often off-peak

* Buyers must pay service charges and taxe foncière

Terms vary from developer to developer but usually owners can sell at any time. At the end of the 11-year term they can enter into a new lease agreement or opt out and retain full use of the property. In some resorts in the French Alps, where authorities have a shortage of rental properties, it is obligatory to negotiate an additional leaseback deal beyond the initial 11-year term.

So far little is known about the long-term market for leaseback properties – do they hold their value over 11 years or more? Are they popular with tourists and therefore have a long-term rental potential? Time will tell.

Three to view

1. Col de Balme

This chalet is at La Tour, the base of slopes which ascend to 2,200 metres. The four-bedroom home has spectacular views over the Chamonix Valley and the Mont Blanc massif. £535,000, Knight Frank, 020-7629 8171, www.knightfrank.co.uk.

2. Le Centaure Residences & Spa, Belle Plagne

Studios, one-, two-, and three-bedroom apartments from £99,000 on a nine-year leaseback deal with a guaranteed annual rental return of 3.25 per cent. Savills, 020-7016 3740, www.savills.co.uk.

3. La Praz, Courchevel

This is the view from a four-bedroom apartment of a chalet located under the 1992 Winter Olympics ski-jump at this chic high-altitude resort. £680,000, Knight Frank, 020-7629 8171, www.knightfrank.co.uk