French Ski Resort Property Review

The French Ski Chalet and Apartment Market - Resort Review.

If you ski often then buying a chalet or apartment in France can make a great deal of sense. Regular skiers often ask themselves whether they should buy a place to use when they are skiing and to rent out when they are not to cover the mortgage. But will the rent cover the mortgage, will the price rises continue and where are the affordable locations with good skiing ?

In this guide we provide data about regions, the types of property available and the potential to make rental income.

To see a list of all French ski properties on sale at present please click here.

How much will a property cost?

In France’s most expensive resorts, such as Courchevel 1850, prices outstrip central London with chalets starting at £700,000 and well over £1m is typical. Roman Abramovich, the Russian tycoon who bought Chelsea football club was unable to buy in Courchevel 1850 at any price last year.

But if good skiing and altitude are your priority, rather than the social scene, there are many great world-class resorts still with reasonable prices that we represent. Chamonix, a good summer and winter French resort, has studios from £40,000 and one-bed apartments from £75,000.

At the recently built village - Les Arcs — Arc 1950, named after its 1,950m altitude — the first phase of one-bed apartments was priced from £118,000 and two-beds from £180,000. In the latest phase, prices run from £150,000 for a studio to £750,000 for three-bed apartments.

France is a natural destination for British buyers. The most popular destination is the Tarentaise Valley and, within that, the Three Valleys region of Courchevel, Méribel and Val Thorens, where chalets cost at least £500,000. In less popular regions, such as Morzine and Avoriaz (jointly known as Portes du Soleil), three-bedroom chalets can be found from £110,000.

Where should I buy?

The higher up you go, the more chance there is of good snow, so look for somewhere with access to slopes above 2,000m. Snow-sure resorts such as Val d’Isère, in France, have the highest prices, but there is affordable property in Les Contamines, near Megève.

Dave Watts, editor of Where to Ski and Snowboard, says: “Consider buying in a village without lifts but within an easy drive of good resorts. Aime and Peisey, below La Plagne and Les Arcs, have knockdown prices compared with resort property.”

Remember that some houses in places such as Courchevel are boarded up in summer. There are a few resorts that combine altitude, pretty villages and a good summer rental seasonand these will be the locations that do really well in the future.

Will I be able to rent out the property ?

Most agents let a ski property for about 10 to 14 weeks in the winter, and 6 to 8 weeks in the summer. To save on the 19.6% Vat purchasers are liable for in France, they can take advantage of a government initiative called leaseback. Under this, buyers agree to let their property through an approved agent (generally the developer or a management agency appointed by it) for a set number of weeks per year, for a set time period (usually 9 years). Leaseback owners have very restricted use — those at Arc 1950 can stay in their apartment for between two and seven weeks a year, spread across summer and winter — and most developments guarantee a gross annual income of about 5% of the purchase price. This is clearly a choice between buying a property for use a few weeks of the year under the leaseback sheme knowing most of your repayment mortgage is covered by the rent guarantee - or - buying a normal property and organising an agent or private lettings and being responsible for all of the maintenance etc. Talk to us for more guidance on which route is for you.

What will the rental income be on a ski property ?

Zigi Davenport, of the ski specialist estate agency Alpine Apartments Agency, says "if you buy a property this year you can average a gross return of 8% of the purchase price if you are prepared to do some of the letting yourself". Remember you will incur overheads such as taxes, service charges and insurance and letting agents charge typically 25% of gross rentals if they do the letting. With mortgage rates of 3.5% or so and repayment mortgages the norm then a normal mortgage may be covered by this income.

Remember the trade off between rental income and you growth of capital value. A studio in Chamonix will rent well, but will get knocked about and may not appreciate much. A luxury chalet in a resort such as Megève may not produce as high a rental return, but is more likely to be well cared for and increase in value. Generally if you can afford the minimum of several hundred thousand for a chalet that you will get good use from personally too then this will likely be your long term best bet.

Should I wait or buy now ?

Any alpine estate agent will tell you to buy now. Prices rise most years, and most resorts have built to their limits. The costs of land and property are rising more than 10% a year: Chalets appreciate better than apartments, so in Megève we have seen price rises for the past two years of about 30% for chalets and 20% for apartments.

MGM built chalets in the small resort of Sainte Foy, near Val d’Isère, three years ago, selling four-bed chalets for £250,000 and six beds for £400,000. These are now being resold for £400,000 and £800,000.

Should I buy property off-plan?

Many new developments, such as Arc 1950 and our Les Contamines developments, are sold out before they are built. Buying off-plan sometimes allows you to make internal changes to the layout and choose finishes if the property is not a French Leaseback Property . The price will be fixed and payments staged. You can also save on solicitor’s fees in France, which are about 2.5% on new homes, but 7% to 10% for older ones. Regulations should also assure the build quality and your property should come with a 10-year guarantee.

If you buy off-plan, check what future development might interfere with the views or access. Engage a qualified lawyer and do not rely solely on the services of the impartial notary nominated by the developer.

Factfile

In France, property purchases attract Vat of 19.6%, but this can be avoided through the leaseback scheme. Leaseback restricts the number of weeks per year that a buyer can use their property, so that it can be rented out as holiday accommodation.

For a new French property bought this year, gross rental income would be about 5% of the purchase price under the leaseback scheme or 8% for purchasers organising their own rentals ebaring in mind the extra work involved.

Small properties tend to generate a large rental income proportional to the purchase price, but larger properties see a higher percentage capital appreciation.

To see a list of all French ski properties on sale at present please click here.