Last update12:12:22 PM

Back You are here: Home Property Buying, Selling, Renting Fractional Ownership

Fractional Ownership

The UK housing market has had a dramatic effect on the buying habits of the population, whilst seeing more opt for fractional ownership. House prices in the UK have soared over the last five years, making it difficult and in some cases impossible for young people and low-income earners to get a foothold on the lucrative UK property market. Yet, many of those fortunate enough to have been in the property market for some time have cashed in on rising prices and growing equity and invested their money in a second home abroad.

But what of those who have been left behind?

Those who are more cautious or who do not have the money to stretch to full ownership of a home abroad should consider a new concept in Bulgarian home ownership - fractional ownership.



What is Fractional Ownership?

Fractional ownership, sometimes known as shared or part ownerrship is the affordable alternative to purchase a freehold property. It is a sensible investment for those who want to enjoy an overseas home, but do not want to tie up all their money in outright ownership. With part ownership you own a share in a luxury home, which you can use or rent out for allotted weeks of the year. You pay just a fraction of the property price and running costs.

Fractional ownership is sometimes known as fractional ownership or shared ownership. It is not another variation of timeshare. It is the genuine ownership of a freehold property by a limited number of people who, between them, legally own the freehold title, the contents and the rights of occupation.

Freehold properties in premium locations have proven to provide a stable, attractive ‘Return On Investment’ over time. As a part owner you can benefit from appreciating property values. You can resell your property or just your share, rent it out or leave it to your loved ones.

Each year an Annual General Meeting is held where the shareowners discuss the needs of the property and vote on whether they should collectively put the property for sale.

Through a share ownership scheme, you only tie up a small part of your capital in your holiday home, leaving you free to invest the rest of your capital in another scheme or dream location.


Property maintenance

Property maintenance is organised in the same way that it would be if you were to buy an apartment. Each year, the part owners pay a maintenance fee. And a property management team is contracted to ensure that the property is well maintained, cleaned for each visit and that the garden areas and pools are kept in good order. The management fee also covers building and contents insurance, monthly electricity, water and sewerage bills as well the annual Bulgarian property tax.

Each year, shareowners can attend the Annual General Meeting, where they are invited to make suggestions about repairs or additions to the facility. They can also vote on whether to sell or retain the property. Shareowners who wish to sell their share may do so privately and do not need the approval of the others.


Fractional ownership is in its infancy in Bulgaria.

This year two companies entered the part ownership arena. One is large developer Best Bulgarian Properties EU, who is offering fractional ownership in a ski complex in Bansko called Royal Towers.

The beauty of this location is that it offers year round tourism and is not just limited to skiing; natural spas, championship golf and hiking are developing in this area.



Fractional ownership with a large-scale developer

With Bansko Towers, buyers agree to hold the property for five years and after this time restraint it will be sold enabling fractional owners to reap the benefits of their original investment and any profit, which has accumulated in the meantime. To ensure the best possible investment price, the managers of Royal Towers intend to get three valuations on the property in order to calculate the sale price. The return target is 60% on original investment. Fractional prices start from 1,740 euros for your share in a one-bedroom apartment.

Your entitlement weeks are calculated by dividing the year into four seasons; platinum for Christmas and New Year, gold for the peak times when skiing is at its best, silver for the shoulder times at beginning and end of ski season and white for the summer period. In this plan you buy your weeks and the cost you pay is calculated on this basis. This is the same way that timeshare works, except that in timeshare properties you literally only own the weeks and not the building itself. With this fractional ownership plan your capital growth will depend on the weeks you buy.

The plan works a little like this:
Platinum Weeks will cost £4,000, Gold weeks will cost £3,600, Silver weeks will cost £2,400, and White weeks will cost £1200. The estimated return on a silver week would be £3,865, if the developers are to achieve their 60%. This is certainly a great way to get onto the property ladder if you do not own the capital to purchase outright or if you prefer less risk, but buyers must proceed with caution when calculating future gains or potential rental income. Plus you keep any rental income in the 5-year period!

Property will be ready mid 2007; you pay 40% on signing. The balance will be due when the property is ready. Finance is available.


Fractional ownership with a small building company

Lancastrian Homes based in Varna, are constructing small villa complexes in the tranquil rural setting of Izgrev and Kalimntsi.


The company is run by expats Sophie and Gary Lancaster who came to Bulgaria last year with their three children.

“We realised that lots of people wanted a slice of the Bulgarian property market after hearing how cheap it was. However on visiting Bulgaria most people realize that cheap properties are limited to old and often derelict properties.”


Sophie recalls, “We decided to build our villas under a fractional ownership scheme, which would enable people on a limited budget to buy a share of a luxury villa at an affordable price. In addition they would be able to capitalize on the growing equity. The Lancastrian Home villas are all close to the Black Sea and offer panoramic views, private grounds and outdoor swimming pools. Prices start at £18,000 for a 1/5th share.