Share and Share Alike, Shared Ownership

By on February 15, 2013
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As the recession continues to bite – shared ownership is proving an increasingly attractive investment proposition.

If the prospect of buying a second home outright is proving something of a pipe dream at present, then shared ownership may offer a viable alternative. Developers within the leisure industry have acknowledged a marked rise in interest in shared ownership schemes in the UK in the past two years, with investors citing “value-for-money” as the key incentive for purchasing, with “hassle-free usage” coming a close second. “The recession has taught people some harsh lessons,” explains fractional consultant, James Perry, “not least of which is how to make a property pay its way. As a part-investment, part-lifestyle product; fractional ownership fulfills this goal. A part share in a property better matches usage with financial outlay, compared to a second home with high overheads that’s likely to be ‘out of action’ for large periods of time. Better still, there’s little, if any, wastage.”

Bucking the current down trend in mainstream residential sales, shares in fractional properties are proving remarkably resilient, with a growing number of premium hotel and property management brands including De Vere and Firstlight setting up shop in a still under exploited market. It’s a move, Brad Lincoln, MD of fractional real estate consultancy The Best Group, considers “good business sense”: “Developers are likely to find the fractional concept easier to sell at present because the outlay is significantly smaller, while buyers get residence rights which better match their expected use. If anything, the real challenge is education – outlining what fractional ownership can actually offer.” Developers, it would seem, are on the right tracks. “With the bulk of projects to date, owners are only too happy to talk to potential clients,” says new build consultant Phillip Meads, “so they get first-hand experience and understand what the product is all about. Transfer that knowledge base into new projects and co-ownership stands a good chance of carving out a niche in the mainstream market.”

Luxury resort hotels group De Vere is expanding its shared ownership portfolio in Glasgow to “meet changing buyer needs”. The company is selling shares of two-bedroom apartments for £53,995 in the Mansion House at The Carrick, part of the Cameron House resort on the banks of Scotland’s Loch Lomond, just thirty minutes from Glasgow Airport. The company has already seen considerable interest in the new launch, both from individuals looking at an accessible lifestyle product, and from companies too.

In Ireland meanwhile, developers behind the prestigious K Club near the Wicklow Mountains National Park in country Kildare, are weathering the country’s fiscal storm better than most. The estate, owned by the winemaking Barton dynasty until 1949, has, more recently, embraced a number of high profile owners including the dynamic Kevin McClory, the film producer responsible for the James Bond film Thunderball.

Set amid 550 acres of parkland on a mile-long private stretch of the River Liffey just thirty-minutes from Dublin, the resort is renowned for its twin championship golf courses (one designed by veteran swinger Arnold Palmer), with a burgeoning portfolio of leisure amenities including a luxury spa and fly fishing school. Working in partnership with co-ownership specialist Firstlight – the estate is selling 1/16th shares (three weeks per annum usage for life) in a luxury two-bedroom apartment overlooking the Palmer Smurfit Golf Course for £43,500, £73,500 for a three-bedroom house, and £103,800 for a four-bedroom residence. Annual maintenance fees average £3,400.

“If residents tire of golf they can exchange their weeks with other Firstlight developments around the globe, such as ski accommodation in the exclusive Aspen resort or Noosa on Queensland’s Gold Coast,” explains Karen Griffin of AJP Worldwide (www.ajpworldwide.com), UK sales agents for the resort. Buyers can also choose to rent out their home privately, and, adds K Club spokesperson Alan Cornelius can expect a return on the larger properties of several thousand Euros a week from “golfing nuts” wanting to play on the course that Arnold built. The fraction can also be resold or willed to a loved one. All, crucially, offer free family membership of the golf club and spa, which alone is worth £67,000 with an annual subscription of £6,000.

Like all well-executed schemes, the K Club has legal structures in place to protect buyers, but with several non-branded initiatives set to hit the market in the coming months, investors need to carefully vet individual contract terms and developer credentials before taking the plunge. “Co-ownership isn’t for everyone,” adds Lincoln, “but if you’re the kind of person who values their privacy and independence and can live with a restricted calendar of occupation, it’s an investment option well worth considering.”

Photo credit: bob the lomond / Foter.com / CC BY-NC