I agree that time share is different to fractional ownership.
The considerations are different depending upon whether the property is being used as a holiday home, or as a pure investment.
For someone looking for a holiday home, buying a share can make good sense, particularly if they are thinking of financing buying the whole property through lettings when they don’t wish to use it. Although there can be good returns from lettings, it is rarely as good as the person selling the property would have you believe, and there are often substantial associated costs. Furthermore, the buyer might prefer to have a share in a property that is only used by the owners’ friends and family, and not let out, so that it is looked after better. Finally, if you want a holiday home which is not let out and you live and work a relatively normal life, then a quarter share in a property effectively means you and the other owners can have it pretty much whenever you wish. You need to ensure that there is compatibility in all your requirements– it won’t work if you all have school age children, or you all want to be there every Christmas!
For someone looking for a pure investment, then as noted above, this is one way of spreading risk. In some locations, more expensive properties appreciate in value more than cheaper ones, and some high growth areas all the properties are expensive. So they might get better capital growth through a share in an expensive property than by buying outright.
However you do need to consider the agents mark-up. Understandably if an agent is selling several shares, the cost of sales is higher so they charge more per share than the straight split of property value by number of shares.
There are ways around this. You can find like-minded people to buy with through websites like yours2share (which I run, to make it clear where my interests lie). If you can find compatible like-minded people to buy with, then it is up to you where and what you buy and how you run the arrangement.
I also think there is much more scope for fractional ownership, particularly to enable people to make the most of their assets and resources. For example, people who would like a base in the city to avoid extensive commuting can partner many other types of people. I have had an extraordinary range of ideas for properties that people would like to share (and indeed for other items: boats, aircraft, jewellery, fine art, horses etc).
Finally the key to making fractional ownership work is to ensure that the contract is right for you. yours2share has lots of guidance and template contracts to help with this. If you are buying a fractional share through an agent, read the contract very carefully and get professional legal advice. The same applies if you are doing it yourself, but here you need to invest some time at the start discussing in detail how it will work with your potential co-owners. The contract is the visible evidence that you have worked it all out properly, and the professional legal advice is your “insurance “policy.
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