Fractional ownership and overseas property buyers

  • 17 years ago
  • Uncategorized
Overseas property buyers from the UK who may be stretched by rising mortgage rates could be attracted to new developments that offer  fractional ownership. This type of financing can allow buyers to purchase a home far beyond their usual budgets.
Les Milton, Chairman of the Fractional Ownership Consultancy says: “Fractional Ownership is the shared ownership of a property, with the title deed being divided into fractions, usually quarters but sometimes into as much as twelfths. A £400,000 property, for example, owned by four owners would cost each £100,000. The owners of each fraction then have the right to stay in their home for the corresponding amount of time. For example, if you own a quarter share, you may stay in it for a quarter of a year – 13 weeks.
“This very much suits people looking for a holiday home abroad. Not only are their initial costs in purchasing the property greatly reduced, but the costs of running it are also shared. And it is very unlikely that they would wish or be able to spend more than 13 weeks a year in their holiday home. Furthermore, they really do OWN 25% of the property, so they take proportionate advantage of any property price rises and asset appreciation.
They can also sell their interest at market value at any time.
Les Milton continues: “The owners, along with family and friends, can afford the lifestyle advantages of a superior property, for which they have only paid 25% of the sales price, and 25% of the service and maintenance costs, too.   Most fractional ownership properties are available in quality resorts with a full range of amenities and facilities, which means the resorts are professionally managed with a full rental programme in place. That is the final benefit to the fractional owner. When he or she is not in residence, the property can be let to generate income, probably enough to pay the overheads for a whole year.”

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