Jenny Knight/ Times Online

Bolt holes abroad will be out of reach if no-frills airlines cut and run

THERE WAS a time, not long ago, when property changed hands only between generations of the same family in certain remote Spanish villages; when hamlets had yet to encounter the voracity of property-hungry Britons; and when French villagers saw their dilapidated barns not as cash cows to be sold by the lorryload to les rosbifs but simply as places to house their cattle.

Now, however, these once sleepy communities are wide awake — stirred not only by the hum of 737s packed with British investors and second-home buyers but also by the ground shifting under their feet as property prices soar.

Clearly, it is not just the easyJets and Ryanairs of this world that have taken off: property prices in places such as Montpellier, Perpignan, Poitiers and La Rochelle have soared way beyond the average increase in property prices in France over the past four years. In Spain, Málaga, Madrid and Alicante, all on low-cost routes, have enjoyed similar price rises. More- over, areas served by budget airlines appear to have experienced bigger rises since 2001 than others that are harder and more expensive to reach. In Montpellier, for example, property prices rose by 144 per cent and in La Rochelle they were up by 126 per cent. In the equally attractive Saint-Etienne, which is not served by a budget airline, prices have risen by 44 per cent.

Yet many buyers do not realise to what extent their investment is a hostage to the fortunes of the budget airlines, which are fighting a price war amid warnings that some smaller carriers may go bust. Last year V-Bird, the Dutch no-frills airline, collapsed.

EasyJet has been issuing profit warnings for the past 18 months, and Ryanair’s tough management is capable of stopping services if airport costs rise. For various reasons Ryanair has ended its services from London to Rimini, Strasbourg and Charleroi. A spokesman for Ryanair said: “We have 220 routes in 19 countries and if a route is not performing we will drop it, although it rarely happens. In the coming months airlines will collapse or consolidate, but we are definitely staying.”

These days, buyers hoping to find cheap properties near the budget airports will have their work cut out. Moneycorp, the foreign exchange company, which has tracked price rises linked to budget airlines, says that bargain properties near airports in Spain and France may be a thing of the past. Marc Morley-Freer, of Moneycorp, said: “The opening up of new continental routes by low-cost carriers looks set to underpin steady prop erty price inflation in key destinations. Seville has become increasingly popular now that it is only a couple of hours away (from London), with a 114 per cent increase in average house prices recorded since December 2001.”

The best chance of finding a snip is to buy in an area set to attract cheap flights. Duncan Lawson did that when he bought a farmhouse near Eymet, shortly before Buzz (since taken over by Ryanair) launched a service from Stansted to Bergerac. According to Moneycorp, average house prices within easy reach of Bergerac airport have risen by 157 per cent since 2001, compared with a 9.3 per cent increase in remoter parts of the Dordogne. At 30km (19 miles) from the airport, Lawson’s house is too far away to get the full price boost, although he is hoping that it will now be a better rental prospect than it was when the nearest airport was Bordeaux.

Peter and Sue Corbett started to house-hunt after cheap flights started from Liverpool to Nice. They have just bought the top flat in a 300-year-old building in the city for €81,000 (£55,000), financed by using equity from their four-bed semi in Liverpool. Peter said: “EasyJet flights cost from as little at £11. Our latest trip cost £68 each. You have to watch their website. Some flights are unexpectedly cheap, but Fridays to Sunday are more expensive. We go door to door in four hours, with a lovely bus ride along the prom to our flat in Nice. We plan to use it for holidays and to let friends and family use it. We bought it for pleasure, not an investment, but still hope for some increase in value. If easyJet pulled the plug on the route, it would make Nice a much less attractive destin ation. But I don’t think it will happen.”

Moneycorp expects cheap flights to maintain house price inflation, but James Price, of the estate agent Knight Frank, sounded a cautious note. He said: “Some places in southwest France that are reliant on one carrier are vulnerable. Second-home owners can manage fare increases, but higher fares would have an impact on holiday rentals. Investors are vulnerable to airlines going belly up or pulling out, so established areas served by more than one airline are safer buy-to-let destinations.”