Thursday, October 2, 2008

Fractional Ownership in the UK

The suggested problem seems to be that fractional ownership is only suitable for resorts with year-round warm climates or places with a very long season for other reasons, e.g. Summer/Winter use of an apartment in the French alps or a city-break location. This long season would mean less pressure on the time allocation and allow smaller fractions to be practical. Of course it does help if the season is longer, but I think that what is really being said is that fractional ownership in the UK (outside of London) is not really suitable for developers looking to make huge profits.

Part of the problem is that developers often only seem to be considering a limited range of holiday experiences (basically luxury beach and/or golf) when it comes to developing fractional schemes. In the UK there are a number of existing leisure concepts which fractional developers could tempt consumers away from, the most significant being timeshare. Also as mentioned above there are a large number of second homes in the UK. The owners of these could be tempted either to sell fractions in their existing assets or to buy new fractional developments as a way of releasing capital.

From the consumers point of view the development of fractional ownership in the UK would open up the possibility of second home ownership to new groups who had not previously believed they could afford it, and had been unwilling to buy timeshare because of the bad publicity/poor investment returns.

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