Monday 14th of February 2005

THE DREAM of owning a home abroad that will be a nice little earner remains exactly that for many people, who are put off by the prospect of organising week after week of holiday lets. Thoughts of lounging serenely by the pool are blighted by images of a dripping tap that needs fixing before the next planeload of clients arrives.

There is an alternative, however. From New Zealand to Sardinia or Spain, homeowners are handing their keys to holiday companies in leaseback schemes. That means that investors buy new properties in a holiday village or ski resort and lease them back to the developer (usually a holiday company). The developer then lets them as part of a package tour and the owner receives a guaranteed rent — on average 4.5 per cent of the purchase price — for the length of the lease, which is usually nine years. That is the theory, but how does it work in practice?

Ronald and Jackie Stubberfield bought a two-bed apartment six years ago at Pont Royal, between Aix and Avignon in Provence, from Pierre et Vacances, one of the biggest leaseback developers and holiday resort operators. “We bought it as an investment, with the added attraction of having an apartment we could use outside the main vacation period,” Ronald says.

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