Demand for ski property snowballs
Interest in French property has been boosted in the past year by record low interest rates. As ski season arrives, that demand has taken to the slopes, with British buyers leading the Pack, thanks to the pound's strength against the euro.
Julian Walker, Director at Skiingproperty.com, says: "The pound spent most of October 2013 worth between €1.17 and €1.18. Now that, a year later, it’s hovering around the €1.27 mark, a typical €400,000 ski home is circa £24,000 cheaper to a British buyer, thanks purely to the better exchange rate.
"Things get even better when you factor in how fixed mortgage rates for non-resident owners in France have fallen, typically to 3.1 per cent from 3.75 per cent last year. This amounts to a further saving of around €29,000 stretched over 20 years on a €400,000 property."
Indeed, lower costs have helped to push up investment yields, making ski resorts even more attractive to international buyers. According to Knight Frank's Prime Ski Property Index (Q2 2014) property in Courchevel village, part of the Three Valleys, can generate an annual return of 6.7 per cent, significantly higher than the 2.8 per cent available on property in central London.
Savills' latest Alpine Property Market Property Spotlight confirms that there has been a flurry of interest in 2014, with sales volumes up 52 per cent year-on-year.
Eager Brits are most keen to invest in leaseback property, says developer MGM French Properties. Indeed, eight out of 10 buyers sought managed leaseback apartments, according to MGM, 10 per cent more than average buyers, attracted by the appeal of guaranteed rental returns and hands-off investment.
French leaseback is "widely considered as one of the safest long-term methods of investing in quality lifestyle property", says Alain Denninger, UK Agent for Pierre & Vacances Center-Parcs Group.
France's leading holiday apartment rental company has more than 45 years experience and welcomes 7.7 million visitors each year. The group has just launched a development of 116 two-bed apartments at ski resort Les Terrasses D’Helios in Flaine Montsoleil. The premium 5 star, ski-in + ski-out residence (at 1,750m altitude with direct chairlift access) offers guaranteed rent for a 10-year lease.
Combined with a 20 per cent VAT rebate and optional personal usage, demand has snowballed, particularly from British buyers.
"We have seen, in the past 6 months, a high demand in premium resorts in the French Alps," Denninger tells TheMoveChannel.com, "namely from foreign investors, especially the British.
"Thanks to very low, long term fixed mortgage rates in France and a very strong GBP currency, there has never been a better time to buy."