9/19/2014
The Times and The Sunday Times e-paper - Bricks and Mortar - 19 Sep 2014 - Page #16
16 Bricks & Mortar
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Friday September 19 2014 | THE TIMES
INTERNATIONAL
A slice of action in a holiday hideaway Timeshare by another name? No, this is co-ownership American style, says Carol Lewis ost people only have a few weeks' holiday a year, so why would they want to put their life savings into a holiday house they will hardly ever visit, asks Robin Barrasford. For him the answer is simple: fractional ownership. The American-born concept of owning a fraction of a property in return for a proportional amount of time to spend on holiday there is growing in popularity this side of the Atlantic —among those who can dissociate it from the much beleaguered concept of the timeshare. Barrasford, whose • : v , ;, ^ company Barrasford & "^ Bird Worldwide builds and sells fractional ownership properties, says: "Timeshare has a bad reputation. I tell people that timeshare was a great idea ruined by greed. It is a hurdle though, when you are trying to sell fractional ownership — it takes time for people to realise that it is different. It's like comparing a motorbike with a car, really." Jerry Cobb, chief executive of the Fractional Ownership Consultancy, which builds and sells fractional homes, says: "It's the first question we field: isn't this just another type of timeshare?' It's not. It is equitable. The developer's margins are reasonable. You own it in perpetuity." Nonetheless, fractional ownership is gaining popularity with British buyers and not just for those looking for a holiday hideaway in a far-off land. The first fractional ownership holiday developments in Britain are poised to
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launch in the next year — OysterShare has plans for a development in Cornwall while Halycon Retreat hopes to launch one in the Highlands. Meanwhile, individual sellers are marketing everything from two-bedroom wooden lodges in the New Forest (£18,500 for l/12th)to two-bedroom apartments in Notting Hill (£86,000, l/12th)on fractional sites such as Lighthouse Italy is one of the most popular European destinations for British fractional buyers and developers (see our story, right). In all the schemes, fractional buyers purchase a share in a property in return for a proportional time allocation; at Borgo di Vagli in Tuscany, for example, buyers can purchase a 1/I0th interest in a two-bedroom cottage for €123.850 (£98,668), entitling them to 28 days planned holiday and unlimited short-notice vacations subject to availability. So what are the pros and cons of fractional ownership? The key benefit is often touted as being the ability to buy a share of bricks and mortar rather than merely buying time. This is not strictly true. In very few cases •™* will the fractional 'NjjjlS BBr owner's name appear on the title deeds; in most cases you are either *" buying membership of a club that holds the property in trust — this is the approach taken by Borgo di Vagli — or buying shares in a limited company that owns the property, according to Chris Bannister, a partner with GRM Law. Nonetheless, buyers are usually able to benefit from capital appreciation on the bricks and mortar in a way that is not possible with timeshare properties. There are also advantages to the membership and limited company structures, according to Bannister; for example, it is easier and often cheaper to sell your stake than it would be to sell the building itself. However, the market in second-hand fractions is still very immature, says Stephen Bishop, a property lawyer, managing partner at BLB and founder of Lighthouse: "People need to check their exit routes. There are not many outlets for used fractions so buyers
Chateau de la Ca/ine at Halcyon Retreat Golf & Spa Resort in Limousin, southwest France, which is selling a need to be sure they are likely to have someone they can sell to. Plus — if they can't sell it back to the developer or on to other co-owners at the moment the market is new and unknown. "It should get easier, though. Fractional ownership is becoming increasingly popular among British and European buyers, especially in the past 18 months, and is going to grow —especially the urban fractional market, I think." One of the advantages of some of the fractional schemes is that they are associated with hotel groups that will maintain the property, can rent it out if you are not using it — often sharing the profits with the owner — and tend to come with added perks such as gyms, spas, golf courses and restaurants. These conditions apply to the Halycon Retreat golf and spa resort in Limousin, southwest trance (which is selling a one-bedroom suite for £200.000 whole ownership or £18,500 for l/13th)and Crane Resorts in Barbados, which is about to launch a collection of beach house properties from $56,000 (£34,322) for fractional
Above: Crane Resorts in Barbados. Below: one of the beachhouses at Crane Resorts where fractional ownership starts from $56,000. Left: Borgo di Vagli fractional ownership village in Tuscany
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ownership to $2.95 million for whole ownership. Some of the larger developments also tend to form partnerships with worldwide fractional clubs. This enables the owners to trade their allocated weeks or collect points towards holiday time in other destinations, getting around one of the disadvantages of owning a holiday home —always going to the same place. Those who want a home from home, though, will have to curb their interior design urges because you cannot redecorate or leave your personal possessions on show when there are 11 other owners. There are definitely pros and cons, but the best fractional schemes do offer people who could not otherwise afford a second property the opportunity to share in the joys of a holiday home. Further information: fractional.net, bandbw.co.uk, lighthousefmctionai.com, dubborgodivagii.com, hakyonretreat.com, beachhouses.bb, www.oyiter-share.com • Save yourself time and money sending or receiving international payments with Times Currency Services. Find out more at timeseurrencyservkes.co.uk
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9/19/2014
The Times and The Sunday Times e-paper - Bricks and Mortar - 19 Sep 2014 - Page #17
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