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Is it time to buy your dream ski chalet while the pound is hot?

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07/02/2014
The strong pound could be a good opportunity for Brits to buy property with a euro-denominated mortgage, writes Alexis Goldberg.

The world is about to be reminded of the thrill of skiing – as well as simply spending time in a mountain resort – when the Winter Olympics kicks off in Russia this week.

It is also a good time to reinforce why investment in ski property has never been more popular among Brits.

While the large majority of France’s property market remains flat, international property consultancy Knight Frank reported price increases of eight per cent in two key resorts in the French Alps – Chamonix and Morzine – during 2013, thanks to growing demand from overseas buyers and infrastructure upgrades.

Conditions remain favourable for foreigners purchasing in the French Alps too. With mortgage rates in France still at historic lows and the euro showing no serious signs of strengthening, it makes financial sense for some UK and other foreign currency buyers to purchase with a French euro-mortgage.

Smart Currency Exchange, an FCA-authorised firm that sends money abroad for Brits at better rates than the banks, has seen definite uplifts in activity to France since the rate has broken and remained above the £1/€1.2 barrier.

Julian Walker, director at Skiingproperty.com, a specialist in new ski homes, said: “Overall, foreign buyers, including Asians, are realising that France’s heavy taxation of its rich residents won’t affect them as non-resident owners of ski homes, so they are taking advantage of the opportunities to purchase a euro asset that comes with strong lifestyle appeal and long-term investment potential.”

Confident that 2014 will be even better than last year, last week MGM, the leading developer in the Savoie and Haute Savoie region of the French Alps, reported a huge hike in interest in January 2014 compared with January last year.

The company has high hopes for a new development in Chamonix – its first ever five-star résidence. Résidence Cristal de Jade will occupy a half-hectare site at the foot of the famous Aiguille du Midi cable car. It is the biggest new development in Chamonix for many years and will form an integral part of a new district on the southern edge of the town.

Construction of Résidence Cristal de Jade is due to get underway in the spring of this year, with the apartments expected to be ready for occupation during the summer of 2016. Current off-plan prices start at €291,666 for a one-bedroom apartment with a floor area of 42.5 square metres rising to €750,000 for an 87-square-metre four-bedroom property. All properties are sold under the leaseback scheme, which means VAT at 20 per cent is waived.

Richard Deans of MGM’s UK sales office in London predicts Résidence Cristal de Jade will help to push up values in Chamonix even more. He said: “Chamonix is one of the most famous ski and mountaineering destinations for UK holidaymakers and buyers in the Alps so it is obviously an indicator of the market. As the biggest town in an area which is a skiing and mountain pursuits destination, it has the widest range of property which helps to give a more global view of the market.”

Confidence in the ski property market is further reflected in the results MGM has had with its newly-opened Le Centaure résidence in Flaine, a resort that forms part of the Grand Massif ski area.

More than half of the apartments, which start from €279,166 for a two-bedroom property, have been sold. The development has attracted British investors, many of whom feel that putting their money into bricks and mortar in a popular ski resort can offer better returns than alternative investment opportunities.

“At Le Centaure they can be assured of a rental yield of around two per cent – and that’s after they have paid the annual maintenance charges,” says Deans.

Alexis Goldberg is author of the France Buying Guide (www.francebuyingguide.com)

 

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