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Expat Investor : May June 2009
EXPAT PROPERTY Fractionally speaking, it all makes sense How to own a quality property in a sought-after foreign location for a fraction of the purchase price. quarter share. Initially, FOC will roll out its fractional ownership system on two Taylor Woodrow developments, both of which are built around the Los Arqueros Golf Course situated only 10 minutes from Marbella. Las Encinas de los Arqueros residential complex is surrounded by a prestigious 27 hole golf course. It comprises two and three bedroom apartments and is in the layout of a Mediterranean village, facing south-east with magnificent terraces and views to the golf club and sea. It will have a swimming pool, communal gardens and external parking spaces. The second is Los Robles de los UK house builder Taylor Woodrow de España has teamed up with The Fractional Ownership Consultancy (FOC) to offer fractional freehold ownership across its portfolio of 16 resorts throughout Spain. The signing will offer a wide range of apartments on a fractional basis at a starting price of €79,000 for a Fractional ownership... what’s it all about? 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. The benefits to buyers include: Les Milton, Chairman of FOC, explains how fractional ownership works. “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. Not only are a buyer’s initial costs in purchasing the property greatly reduced, but the costs of running it are also shared. 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. 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 ● asset appreciation through freehold ownership. ● acquiring an affordable luxury lifestyle. ● minimisation of running costs in relation to usage. ● a professionally managed home and infrastructure. ● income generation from rental of unoccupied periods. Advantages to developers include: ● maximising profit opportunities through increased property values. ● increasing sales velocity. ● opening up a much larger market. ● creating a busy all year round resort. ● developing an ongoing business through rental and resort management. FOC is continuing to expand within Portugal and into Spain, Cyprus, Morocco, Florida, Egypt and the Caribbean. Arqueros, a residential complex with an Andalusian flavour on one of the best golf courses on the Costa del Sol. It comprises two and three bedroom apartments with luxury finishes and generous and sunny terraces with great views of the sunsets in Andalusia. The properties face south and southwest with magnificent terraces and gardens orientated towards the golf course and the sea. Los Arqueros Golf Course is just a short drive from the international airports of Málaga and Gibraltar, and only 10 minutes from Marbella. It was the first golf course to be designed by Severiano Ballesteros. As the designer himself says, Los Arqueros is a good course for players of all kinds – a reasonable challenge for the average golfer and a tough test for professionals. Les Milton, Chairman of FOC, says, “When thinking about an overseas property purchase many people consider top quality golf a priority. The opportunity to acquire a fraction of the freehold of one of these stunning apartments will appeal to the most discerning golfer.” Taylor Woodrow de España has also partnered with accreditation scheme Safe Buying Experience (SBE), to help ensure purchasers in the country are able to buy a home as part of a safe and secure process. This partnership provides a double reassurance to buyers as they are now guaranteed a quality home complete with independent endorsement as to its ‘integrity, legality and safety’. “Using the example of a quarter share, buyers really do own 25% of the property, so they take proportionate advantage of any property price rises and asset appreciation. They pay just a quarter of the property maintenance costs and they can sell their interest at market value at any time. “Furthermore, owners are entitled to 13 weeks occupation spread across the year and if they do not want to use up all of that time the property, it can be let to generate income to help defray any annual expenses.” Have I NOT got mortgage tips for you! Research by professional advice website Unbiased.co.uk reveals that while 62% of Britain’s homeowners would normally feel comfortable offering mortgage tips to friends, family or colleagues, today’s confusing lending market has sapped the confidence of more than a third (37%) of this group. Men are most likely to dispense advice on what is best for a friend’s next mortgage deal, with 44% still confident to offer their opinion (down from 66% 12 months ago) compared to 30% of women (down from 45% 12 months ago). This loss of confidence is, unsurprisingly, also reflected in homeowners’ ability to identify their own best options. Thirty-six per cent of homeowners who would normally be comfortable choosing their own mortgage would now instead look for professional advice, while 28% of homeowners are clear they would never try to negotiate the mortgage maze without expert advice. Richard Winder, spokesperson for Unbiased.co.uk, which runs a ‘find a mortgage adviser’ local search service, comments, “Throughout the property boom, homeowners felt far more comfortable swapping mortgage or property tips over Sunday lunch, since a competitive and fairly clear-cut lending market meant borrowers were less fearful of losing out. Credit crunch confusion in the mortgage market has since sapped borrowers’ confidence in choosing the right approach or products both for themselves and for friends or family.” Unbiased.co.uk’s research also shows that women are more affected by the ‘confidence wobbles’ when making their own decisions, with one in four (25%) feeling less confident than a year ago about making their own mortgage decisions, compared to a drop of 21% among men. Nearly a third (31%) of women also say they would never make a mortgage decision without professional advice, while only a quarter (24%) of men wouldn’t seek a new mortgage without this advice. Richard Winder adds, “In today’s fast-changing mortgage market, borrowers can no longer count on general rules, and this is where professional, personal mortgage advice can make a clear difference. Only a whole of market mortgage adviser will be able to search the entire market to help borrowers find the best deal for their circumstances, helping them buy a first home, reduce their monthly mortgage payments or review their property investment options.” May/June 2009 ● EXPAT INVESTOR 21
March April 2009