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 31st July 2010
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 The changing face of French leaseback buyingMain story: French leaseback - the basicsThere are many types of guaranteed rental schemes within the international property arena, but the French leaseback scheme which dates back to the 1980’s, could be described as the ‘mother’ of all schemes. It is not simply a short-term developers’ subsidy as seen in some emerging markets, but is a genuine guaranteed rental scheme. It is positively encouraged by the French government to meet the huge demand for rental property in quality holiday destinations and who reward purchasers entering into the system by offering them a 19.6% VAT refund. Over the last six years or so that I have been involved in the leaseback market, it’s been interesting to note the changing market trends and how the market place has evolved and now attracts different types of buyers with different reasons for buying. If we think back to say just three or four years ago, then the typical British or Irish purchaser of a leaseback was more often than not an ‘armchair investor’. At that time, French interest rates were around 3% and rental yields were 6%; it could be described in common parlance as a ‘no brainer’ ! Unsophisticated would-be investors were buying off plan and unseen, delighted by a low-risk ‘hands-off’, fully managed investment property - whilst more seasoned professionals looked to diversify their existing portfolio into overseas markets and were equally attracted by leaseback. Things have moved on now and whilst the current economic climate is considerably different, there are equally good reasons to look at leaseback - albeit from a different angle. Whilst still offering the upfront tax break from the VAT refund and a fully managed rental solution, if you see a rental yield quoted today at say, 6%, and which looks too good to be true, then it probably is ! However, when the reality of owning your own holiday home sinks in, and you consider who will look after your cottage or apartment when you’re not there, and you do not wish to cut the grass when you are in residence, then leaseback could be for you. Seasonal For example, if you consider the rental income more as a ‘mortgage subsidy’ to offset some of your running costs, let your seasonal tenants pay your taxe d’habitation and wish to leave ongoing maintenance worries to someone else whilst you enjoy your holidays in your own property, then leaseback offers a perfect lock-up and leave solution. Another added bonus of course is that major management companies let you swap your property for weeks in other resorts so you don’t have to spend the next few years in the same place if you do not wish to do so. This is ideal if you can’t decide between a winter or summer holiday or between a coastal or mountain resort one year! So, leaseback is still popular but now appeals more to the life-style purchaser than to the pure investor. With our hectic lives, we Brits seem to end up ‘time poor, cash rich’ and envy the French way of life. So why not take the hassle out of holiday-home ownership and revisit your options under the French leaseback scheme - after all, the French invented it ! Martin Sadler International Sales Manager Assetz France http://france.assetz.co.uk 0845 400 6000 See also: 'Why I bought leaseback'  A beginner's guide to buying French property ‘Why I bought a French leaseback flat’ French Leaseback - Buying Leaseback Properties in France Home Page Looking for a property in France? Use FrenchEntrée's Property Finders to help you find your property and to help you through the buying process 
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