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Both fractional ownership and timesharing provide excellent holiday property opportunities, allowing individuals to enjoy spending time in a luxury home without the expense of full ownership or the hassle of booking regular breaks. However, there are still distinct differences between the two, which is what we’re here to discuss.

Timeshares

Timesharing has grown in popularity over the last 50 years, cementing itself as an affordable alternative to full holiday home ownership. Timeshare owners purchase the right to live in a property for a specified length of time each year. This is usually around 1-3 weeks, though varies from share to share. The key detail is that timeshare owners only have permission to occupy the property, whilst ownership of the building itself remains with the original deed owner.

Most timeshare agreements involve staying at a single property for a set period of time, starting on a specified date (called a fixed week). However, over recent years, other practices have become popular, including the use of floating weeks and point-based systems.

Floating weeks allow an individual to purchase a timeshare for a non-specific week between a predetermined range of dates. This gives the owner flexibility to choose when they would like to reside in the property but equally leaves a lot of risks as reservations usually operate on a first-come, first-serve system. This means that if the individual desires a specific week and it’s already taken by another timeshare owner, there’s nothing they can do.

An even more recent development is the point systems sometimes used with hotel resorts and chains. In this scenario, timeshare owners purchase points that can be used at any of the properties within the resort chain. This offers the same advantages in terms of flexibility, but also comes with the same reservation risks because your time and date are not reserved from the outset.

The length of a timeshare ownership varies greatly. Many operate where ownership lasts several years, whilst others are permanent and can be inherited or sold.

Timeshares usually involve an initial one-time purchase with monthly maintenance charges moving forward. Maintenance charges typically encompass property repairs, upkeep, insurance and taxes, though it depends heavily on location and is unique to each specific agreement.

Fractional Ownership

London Fractions was built on the concept of true fractional ownership; we believe that it is the most efficient and effective way to affordably invest in luxury property. This is the key advantage of fractional ownership – it’s an investment.

Whilst timesharing involves purchasing time, fractional ownership gives the buyer a percentage of the property deed. An individual taking part in fractional ownership owns a portion of the “bricks and mortar” property, as opposed to solely the right to occupy the building for a specified period of time. This is essential because it means that as the property’s value increases, so does each individual fraction. Therefore, those who own a fraction of a luxury property not only get to stay there but get to benefit from its improvement and rise in value.

We offer our properties in twelfths, meaning that the minimum an individual can purchase is 4 weeks’ occupation per year in addition to 1/12th of the title deed, although this can vary with other fractional ownership agreements. Payment operates in a similar way to timesharing, with an upfront payment (sometimes offered on finance) and monthly or annual maintenance fees. The details of what is included in these fees also varies from agreement to agreement.

As the title deed of the property is shared between the separate fractional owners, most organisations will appoint a dedicated property manager or a management company to control the scheduling of time and building maintenance.

In Summary

Fractional ownership and time-sharing are similar concepts but far from the same reality. The fundamental difference is that timeshares involve the purchasing of a set interval that you can stay in the property, whilst fractional ownership is an investment, giving you possession of a percentage of the building whilst simultaneously allowing you to stay in the property for a given period. If you have any other questions about fractional ownership, check out our FAQs or get in touch with us today.

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