Fractional Ownership

Fractional Ownership – The Affordable Place in the Sun

The nights are longer, the temperature has dropped and all around people are exclaiming how cold it is. Winter is almost upon us and yes, it’s going to get even colder! It’s no wonder that at this time of year many of us dream of buying a second home in warmer climes; and for many, it no longer has to be a dream as fractional ownership is fast gaining popularity in Europe.

Essentially it means that a group of investors can club together to buy a property, hence owning a ‘fraction’ of it themselves. The vital components of the agreement such as preferred dates of usage and maintenance costs are agreed before the sale completes. It can make an expensive property, such as a French Chateau which may cost £2million seems far better value for money. Hence a group of 8 buyers each purchase the fraction at £250K each and still get the same value (four to six weeks per year) for their money.

The concept first developed in the United States in the 1980’s and early 1990’s was predominately used for yacht ownership. It meant that this industry opened up to other enthusiasts who may not have been able to afford the price tag of a whole yacht but were happy to share the vessel with other like-minded people. Of course the scheme has to be managed correctly but like any freehold title, there are full rights for transfer of ownership if a sale is required.


One disadvantage that outright and fractional ownership may have is the sense of obligation that the owner(s) may feel they have to return to the same place every year for their holidays. This is where membership clubs and resort residences come into their own and may provide a better (and in some cases more affordable solution) to owning a property abroad.

With a membership club, an annual subscription is charged which entitles the member to use a selection of houses for rent around the world. It will mean that you never ‘own’ a property as they are held by the membership company but you will get a choice of properties that you can stay in for agreed length of time. Often homes are categorised with a point system; a stay in a Balinese spa hotel may cost more points than two-weeks in a Tuscan apartment. There are various levels of membership to suit all budgets and it offers considerable flexibility for the buyer who likes to holiday in a variety of places.

In the same vein are resort residences although this combines hotel luxury with outright ownership. It tends to suit those at the top end of the international market as the prices can be high. Essentially it gives people the opportunity to own a residence on a hotel site with the benefits such as use of spa, golf and favourable discounts for food and beverage bills as part of the package. Owners can also negotiate with the hotelier for rents when the property is unoccupied.

Although fractional ownership seems to be the sensible way for owners to invest, some of these other options could suit both the pocket and the holiday mindset of the discerning traveller looking for that perfect place in the sun.