0835 Leisure Summer 08_aw.indd - HLL Humberts Leisure

Fractional OwnershipBom Sucesso, Silver Coast. Near LisbonFraction of the costLes Milton asks if the future for holidayhome sales lies in Fractional OwnershipIt is fair to say that the market for holiday homes in the UK andEurope is under some pressure as in the US, although with anexchange rate of $2.00 to the pound Floridian property is definitelyworth inspection.But even against this depressing background, Brits who havealways had a well cultivated ownership gene, could find the currentmarket full of opportunities – if they are prepared to consider therelatively new concept of fractional ownership, sometimes calledshared ownership.Fractional Ownership – what is it ?Fractional Ownership allows several unconnected buyers tocollectively own the freehold of a holiday home. In practice thedeveloper finds the buyers and guides them through the ownershipprocess. Quite often fractional ownership involves four people eachcontributing towards the cost of buying the property between themi.e. they each own 25% of the bricks and mortar.So if you have a second home budget of £ 100,000 rather than buya one bedroom apartment in Southern Spain, you could afford aquarter share of a £ 400,000 villa. The legal implications may sounddifficult and risky – but they are not. Fractional packages of thisnature have been available in Europe, especially in Portugal for thelast seven years with few problems or complaints.Think about it. How much practical sense is there in owning asecond home in a sunshine resort when at best you can only spend6 or 7 weeks there each year. With, say, a quarter share, you wouldhave 13 weeks a year potential occupancy of a villa that you own.You could stay there for some of the time,give your parents or family the opportunityfor a holiday break and still have time to rentout your villa to recover some of your costs.Remember if you own 25% of the homeequity, you only pay 25% of the service andmaintenance costs.Fractional Ownership meets the needs ofmany potential buyers.■ Those who would like to buy their dreamhome but lack the funds.■ Others who may have the funds butrecognise that it makes no economicsense to own a property outright forlimited use.■ Research suggests that the majority ofpeople can only holiday for 8-10 weeksper year, maximum.■ Fractional Ownership is also the perfectway to test ownership before committingto the outright purchase of a villa orapartment.Over the last six years Fractional Ownershiphas been the fastest growing sector of theUS property market and in 2006 it grew by+32% over the previous year.In Europe the concept was introduced a fewyears ago but is quickly growing, especiallyin the South.32 Summer 2008