Want to own a property in France and think that letting it out to holidaymakers will make it pay for itself? Think again. Oversupply of gites in some areas such as the Dordogne is shattering British property buyers' dreams, while the cost of marketing a property and finding holiday rentals is climbing steeply. 

There is also growing alarm among the French about an invasion of British buyers who were initially welcomed but are now accused of pushing up prices and crowding out the locals. 

Many buyers are drawn into investing in France with expectations that they will earn a yield of around 7.5% on their property. France has around 60m visitors a year and demand remains strong. But British holidaymakers are becoming far more choosy about the quality of accommodation. A swimming pool is now a must - as are top-quality appliances. 

Stephen Smith, co-author of Letting French Property Successfully, says: "The key is to write a good description of the accommodation and, above all, tell the truth. If you say you have a sea view but you have to stand on the toilet to see it, it will generate negative feedback from clients." 

Mr Smith says a number of factors affect the amount of rent you will be able to achieve. The most important is whether or not there is a swimming pool. The highest rentals come from being close to shops and a bar - not necessarily a restaurant - and having well-equipped kitchens. 

One of the most popular options for independent owners is to advertise through the Chez Nous brochure. This lists more than 3000 properties with more on the internet, and is sent free to potential holidaymakers in the UK. Chez Nous does not check availability or take bookings, nor does it inspect the properties published in the brochure. Owners organise everything directly with a client.  

Esther Grounds of Chez Nous says the demand for this service has grown considerably in recent years. "Chez Nous appeals to homeowners who want us to have a hands-off approach," she says. "If you want to be independent and manage the telephone calls and bookings this works." 

But it's not cheap; a small black and white advert in the brochure costs £350 plus VAT, a colour ad is £420 plus VAT. Internet advertising only is £225 a year. Ms Grounds says the market for people providing holiday accommodation in France has become more competitive in recent years. 

"Five years ago owners found placing one advert in one place was sufficient," she says. "Nowadays they are finding one advert is not enough and are marketing their homes across a range of outlets."  

But if the idea of going-it-alone does not appeal, home owners can alternatively pass their property on to a tour operator, which will take on the hassle of advertising and organising bookings for a fee or a commission. Bowhills is one such company, but spokeswoman Ann Flello says they are only interested in properties with pools. "People who take their holidays in France are becoming more and more demanding," she says. 

"They all want a pool and in most cases the accommodation must be equipped to the standards of their own home." For inclusion in their brochure, Bowhills agrees a net weekly rental with the homeowner to which they add an undisclosed mark-up. Flello warns that some areas are already over-subscribed. "In the Dordogne, for example, supply possibly exceeds demand and we are sensitive about taking on properties in that region," she says. "On the other hand Languedoc has been opened up by low-cost flights to the region."  

Stephen Smith emphasises that all rental income generated from property must be declared to the French tax authorities under the terms of the France-UK double tax treaty. "Even if a property is rented out to a favourite aunt, the income must be reported," he explains. 

Tension grows as locals baulk at British invasion. There are signs of growing tension between the British who are snapping up cheap property to renovate and French locals who often find themselves priced out of the market. In Brittany graffiti urging "Brits out, stop speculation" was recently daubed on the offices of a notary who handles house purchases for UK buyers. 

Local people claim British buyers have pushed up house prices in the area by as much as 50% over the past few years. Some also complain British families moving into the region are putting young children straight into French schools with no knowledge of the language. This, they argue, is holding back French children in the same classes.  

A report on a popular French TV documentary programme showed one British couple who had still not managed to master the basics of the language after living in France for more than a year. 

Miranda Neame, who also featured in the documentary, is editor of French News, a monthly newspaper for British ex-pats. She has lived in the Dordogne for more than 30 years and says tension is brewing. She says the French have seen British people moving into the area buying cheap property and turning them into beautiful homes. They now want to do the same, but find property prices too high. 

"The French love what the Brits have done to these old houses and the beautiful gar dens they've created. But not only are these houses too expensive for local residents, but there's a dearth of property around. I think this is going to be a problem. Not just here but also in places like Brittany." Prices in the Dordogne have risen steeply over the past decade. The town of Eymet has an estimated 500 British residents out of a total population of 4,500. 

There are said to be 20,000 Brits altogether living in the Dordogne with the number increasing to a staggering 100,000 during the summer months. While some businesses argue British homeowners and tourists bring money into the area others fear for local culture as the markets and shops cater for the foreign clientele. 

Cheddar and Stilton feature on the stalls in local markets. There are pubs, cricket clubs and even the Dordogne Ladies club. Ms Neame says permanent residents are more accepted then second-home owners. "Local people don't like to see property lying vacant for months at a time," she says. "Although it's worth remembering a lot of these local villages were dying before the British came along and bought up property." 

Ms Neame points out anger is not just aimed at foreigners. Wealthy Parisians buying weekend homes to escape the stresses and strains of life in the big city are also a source of resentment.  

Whatever the problems, British enthusiasm for la vie a la francaise shows no signs of abating. The airport at Bergerac which gives swift access to "Dordogneshire" is increasing the size of its runways to allow larger aircraft to land from the end of this month.

Why the bubble may have burst in rush for gites.

France is awash with Brits renovating properties to enable them to offer gite accommodation - and inevitably not all of them will survive.

I have just spent 15 months living in the Gers area of south-west France and almost every British person you meet is doing up a house and planning to offer holiday accommodation. Many have enough money to do up the house, but once that is done they will be relying on the rental income from holiday lets. 

The problem, to my mind, is that there are simply too many people doing it and rents will start to fall as more houses come on to the market. Lots of those already offering gites in the area are struggling to attract bookings outside the magical months of July and August when everyone in Europe goes on holiday. 

While the low-cost airlines, which now fly in Toulouse and Pau have certainly helped to bring people into the area, there are only so many people who are looking to rent houses at £600 per week. There are also plenty of Dutch people, Germans and even Danes vying for trade alongside the local French population. 

The underlying problem is that the return on capital invested will be unlikely to provide enough money for the average family to live on. Almost everyone experiences delays in getting the property ready to rent- typically it takes most people eight-12 months longer than they think it will to bring up to the required standard. Many of those I met were spending upwards of £300,000 on their house and gite business and that's before they had furnished the property. 

There is a shortage of artisans in France, and it is very difficult to find good people to do the work. Some roofers have people waiting two years for them to start work. A swimming pool is now a must and they cost £20,000. 

Leaving aside the extra money you will need to support yourself to cover any delays, the income for most people probably won't be enough. If you are really lucky and can rent it out for 20 weeks a year at £600 per week, that still only adds up to £12,000 a year. From that you have to deduct the running costs and tax - which doesn't leave a lot to live on. Of course there are exceptions to the rule. I came across one couple who had set up a gite/bed & breakfast business near the famous Nogaro motor racing circuit -and it was an instant hit. They were sustained by the fact that the circuit received visitors throughout the year. 

The same business 80km further south would probably be struggling. Also, those who didn't have to rely on the gite, they had a pension or some form of income, were fine. The other alternative is to invest the money that you would be spending in other ways. The buy-to-let market in France is not as developed as it is here, and that might be an option. You can always rent out your UK property, and rent you somewhere to live in in France. You may not be living "the dream" but in pure monetary terms, it makes a lot more sense. 

by, Judith Larner  (The Guardian)