Landlords could enjoy free French property

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Thu, 12 Jan 2006

Landlords could expand their property portfolio to include free French homes.

Changes to mortgages rules mean that UK buyers could take advantage of the French sale and lease-back scheme to cover the cost of a mortgage.

Overseas property investment firm Assetz points out this will enable landlords the chance buy a property in France for free and maybe make a profit from renting it out during the holiday season.

"Investors can now purchase a nine or ten-year guaranteed rental property using an interest only mortgage," said Stuart Law, Assetz managing director.

He added: "This means that even if they use the property for a few weeks a year and get a low four per cent yield as the rent guarantee for the rest of the year, the mortgage cost is still the same or less than the rental income, making it effectively a free holiday home."

In some cases, landlords could see a five to five-and-a-half per cent yield, especially if they take advantage of low mortgage rates of around three per cent.


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