Holiday home developer and manager Pierre & Vacances has bucked the trend with a 6 per cent increase in profits.

Eighty percent of new P & V clients are investors looking to benefit from really low French mortgage interest rates according to Nick Leach, the French company’s head of international sales.

“The rates are the best we have ever seen. Not only are rates good but the banks are actually lending. The guaranteed rental income we provide to investors is backed by the tourism operation of our Group which is thriving due to the increase in tourism of proximity pushing occupation to high levels this season", he said.

P&V has declared healthy Q4 results and will distribute the same level of dividend as last year, €2.7 per share.

The Group believes it has benefitted from the trend for French and Northern European holiday makers to spend their holidays closer to home and P&V’s self-catering properties present them a cost-effective option.

P&V’s portfolio includes over 250 ski, city and seaside resorts under eight brands, providing diverse accommodation for all market segments.

The Property Investment division sells all of the real estate under these brands in these key destinations, as leaseback investments.

MGM caters for the luxury ski market, Adagio (a new joint venture with the Accor group) caters for city/business breaks, P&V caters for the upper middle family holiday and Maeva for those with lower budgets.

The company claims its financial health and strength is under-pinned by the low debt level of the company and the limited acquisitions made during the last two years when prices were high and this is vital as it this ensures the guaranteed rental income promised to leaseback property investors is delivered.

A P&V freehold leaseback provides rental guarantees on a nine year renewable lease and is net of all running costs and charges. The rental income is index-linked to the dwelling rents index in France.

In the 70s the French government offered a tax incentive to improve the quality and volume of tourist accommodation. An added incentive to purchase property for tourism purposes was proposed so that the 19.6 percent VAT normally added to new build properties in France would be refunded.

With a lump sum investment starting at eight percent a P&V leaseback is self-financing on a repayment basis providing interesting returns when compared with savings accounts or other alternatives. Assuming some capital growth in the property the rental income will fund the mortgage leaving clients a lump sum in 25 years or a steady income.

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