Property buyers warned against luxury European holiday home schemes
Property buyers are being urged to think twice before investing in schemes that offer shares in luxury holiday homes.
The companies offer fractional shares in homes in popular European holiday destinations including the Costa del Sol and Balearic Islands in Spain, and ski resorts in the French Alps. The schemes offer buyers ownership between an eighth and half of a property.
Those who own one eighth of a property generally enjoy access to it for six to seven weeks each year.
But experts said that while the scheme could cut accommodation costs abroad, those using it to invest could be caught out by higher than anticipated fees that erode any potential returns. Others, experts said, could struggle to sell up.
This is not a timeshare
Shared owners generally benefit from at least two visits during each of the high season, 'mid season' and low season. The cost of a share in a property varies depending on its location and size.
One popular estate agency offers an eighth of a four-bedroom chalet in Menorca, Spain, for around £121,000. Another offers a share of the same size in a three-bedroom villa in Mallorca for £386,000.
In addition to the initial purchase fee, shared owners generally have to pay monthly or annual maintenance and administration fees of up to 2.5pc of the share cost each year – even in months when they themselves are not using the property.
Darren Fletcher, of wealth management firm Chase Buchanan, said: 'Ongoing expenses such as maintenance, management fees and refurbishments can sometimes be higher than anticipated, reducing overall returns and potentially dampening enjoyment.'
Fractional ownership schemes differ to timeshare schemes, which allow holidaymakers to buy the right to use properties for a certain amount of time each year, and were particularly popular during the 1980s and 1990s.
Jason Hollands, of wealth management firm Evelyn Partners, said: 'Unlike timeshare schemes, which provide a right to use a property for a certain period each year, fractional ownership gives you a stake in it – typically through a limited company – exposing you to the potential for price gains.'
But exposure to movement in the property's price could go both ways, and even if a property's price stayed still, fluctuations in foreign currency could quickly wipe out a portion of the investment in terms of pounds sterling.
Unregulated schemes
Hollands said that there are other potential dangers that come with this type of investment.
He said: 'From an investment perspective, there are of course numerous pitfalls. Firstly, these are unregulated schemes – property is an illiquid asset, and you may not be able to easily dispose of your share. There is also the potential for disputes between owners around things like maintenance and upkeep costs.'
It comes after Spanish officials earlier this year announced plans to implement a 100pc tax on property purchases by non-EU buyers.
Experts said anybody considering fractional ownership of a holiday home should be doing so first and foremost because they plan to use it over a long period of time, rather than as an investment.
Fletcher added: 'Unlike traditional property ownership, selling your fractional share can be complex. The secondary market for these shares is often limited, meaning it may take longer to sell, possibly at a discounted price.
'Clients should also be aware of platform risk, meaning the reliability and financial stability of the company managing the fractional ownership arrangement.
'Regarding investment returns, we would encourage clients to manage expectations carefully. Fractional holiday home investments usually don't deliver substantial capital appreciation compared to outright property ownership. Instead, most of the benefit lies in lifestyle enjoyment rather than significant financial gains.'
*Please note that by submitting your content to us you are consenting to The Telegraph processing your personal data where required by law. For further details please see our Privacy Notice.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Daily Mail
a day ago
- Daily Mail
It's Beni-dormant! Gleeful Spanish locals rejoice after seeing drop in Costa del Sol holidaymakers after years of anti-tourism protests - as pictures show half-empty restaurants
It's Beni-dormant! Gleeful Spanish locals rejoice after seeing drop in Costa del Sol holidaymakers after years of anti-tourism protests - as pictures show half-empty restaurants Gleeful Spanish locals are rejoicing after seeing a drop in the number of Costa Del Sol holidaymakers following years of angry anti-tourism demonstrations. The holiday hotspot has recorded its first decline in visitors since the Covid-19 pandemic - with typically bustling destinations seemingly becoming far less-crowded. Images from Benidorm taken in the last few days show empty chairs outside bars and restaurants - rare for this time of year when they are usually rammed with tourists. The pictures follow mass protests across Spain where thousands have claimed excessive tourism is forcing locals out of affordable housing, raising the cost of living and making the city centres unusable. Majorca has also seen a sharp decline in tourist numbers, with officials claiming that a relentless campaign of anti-tourist protests is 'scaring away visitors' as locals say some resorts are now 'completely dead'. In Costa del Sol, the holiday rental sector saw a drop of 2.2% in tourist numbers during the first half of the year - a trend that has accelerated since March, when numbers hit a low of 57%, according to local paper Sur In English. While the downturn has sparked concern among some local businesses, others see it as a welcome break after years of over tourism and have taken to social media to share their relief. One person wrote: 'The news is painted as bad but the reality is that it's good. Tourism is fine but the tourist mass coming to Malaga was more than the city could handle. I'd rather take care of 10 tourists well than 100 bad.' Gleeful Spanish locals are rejoicing after seeing a drop in the number of Costa Del Sol holidaymakers following years of angry anti-tourism demonstrations. Pictured: An empty bar a few days ago An image taken of the same bar sharply contrasts with scenes in March this year (pictured) when the same terrace was rammed with drinkers Pictured: Benidorm with unusually quiet bar terraces and some space on the local beaches Images from Benidorm show empty chairs outside bars and space on beaches - rare for this time of year when they are usually rammed with tourists In Costa del Sol, the holiday rental sector saw a drop of 2.2% in tourist numbers during the first half of the year - a trend that has accelerated since March, when numbers hit a low of 57%. Pictured: A bar in Benidorm with empty tables While the downturn has sparked concern among local businesses, others see it as a welcome break after years of struggling to cope with overtourism Another added: 'Very good news, let's see if we stop depending on tourism and the business fabric returns to Spain. 'Tourism should be regulated somehow and see if the real estate bubble explodes because of that and people here can buy a house again like it used to be.' A third said: 'It seems good to me, that it goes down, even if it negative impact on commerce (and I feel sorry for those freelancers) but if we settle in that niche we will never be able to improve the rent of the Malagasy, added to that the price of the property would continue to rise. 'We don't want displaced Malagasy people, we want Malagasy people thriving. Tourism is not bad, but Malaga needs to grow according to its situation, and what was happening is that we were above what we could stand. 'Let's see if this helps entrepreneurs to rethink if the only business that thrives in Malaga is the quaternary sector... We want more industry, which can really make Malagasy people increase their capital!!!' Pictured: Locals express their feelings about the decline in tourists It follows mass protests across Spain where thousands have claimed excessive tourism is forcing locals out of affordable housing, raising the cost of living and making the city centres unusable. Pictured: A beach in Benidorm The decline in tourist numbers is thought to be caused by a combination of rising prices, overtourism concerns, and a shift in travel preferences The decline in tourist numbers is thought to be caused by a combination of rising prices, overtourism concerns, and a shift in travel preferences. It comes as a slump in spending in Majorca this summer has been blamed on the wave of anti-tourism protests that have gripped Spain. With British holidaymakers seemingly among foreigners turning their backs on the island, its tourism industry is in panic mode as officials overseeing the nightlife sector and tour companies warn that guests no longer feel 'welcomed'. The restaurant association president, Juanmi Ferrer, gave a stark warning that the messaging of the protests is 'scaring visitors away'. Additionally, Miguel Pérez-Marsá, head of the nightlife association, told Majorca Daily Bulletin: 'The tourists we're interested in are being driven away; they don't feel welcome and are going to other destinations.' Local media reports that the situation has become so dire that some managers have given staff holidays in the middle of July, which is often the height of the summer rush. Costa del Sol isn't the only Spanish holiday hotspot experiencing a drop in visitors this year - Majorca has also seen a sharp decline in tourist numbers. Pictured: Jumping Jacks bar a few days ago This is the same bar pictured last year, before the decline in tourist numbers Pictured: A beach in Benidorm unusually quiet for this time of year This time of year beaches in Benidorm are expected to be rammed with tourists at this time of year but images suggest otherwise Streets are also far quieter than usual in the Spanish municipality Costa del Sol isn't the only Spanish holiday hotspot experiencing a drop in visitors this year - Majorca has also seen a sharp decline in tourist numbers. Spanish officials have admitted that a relentless campaign of anti-tourist protests in Majorca is 'scaring away visitors' - with locals claiming some resorts are now 'completely dead' But it's not just bars, restaurants, and nightlife venues feeling the slump. Tour guides are seeing the same downward trend. Pedro Oliver, president of the College of Tour Guides, said: 'The anti-tourism messages are resonating.' He revealed excursion sales have dropped by 20 per cent this summer, with Valldemossa, Palma and Port Soller among the worst-hit areas as British, German, and Italian tourists have all been put off. 'If you generate negative news, which has repercussions in other countries, tourists opt for other destinations when choosing their holidays,' he said. 'We are sending the message that we don't want tourists and that everything is too crowded.' Excursion operator Proguies Turístics normally offers around 30 excursions per cruise. That number is now down to just 12 to 14. Its president, Biel Rosales, warned: 'Tourismphobia and the idea that tourists are not welcome are hurting us greatly.' He added that high prices and traffic jams are also turning tourists away. Transport bosses are also worried. Rafel Roig, president of the transport federation, said: 'You can't send out these messages because people won't go where they're not wanted.' Coach firms and taxi drivers have both seen a decline in customers. Majorca's beaches, often filled with tourists has seen fewer people than usual Pictured: Empty chairs outside a restaurant in Majorca a few days ago A recent image shows another empty restaurant in Majorca Biel Moragues, from one of the island's taxi associations, said: 'British tourists are the most upset by the protests and have changed their holiday destination.' Locals now say tourism on the island is completely different from years gone by. It comes after anti-tourism activists have wreaked havoc across Spain this summer. Thousands of protestors marched through central Barcelona last month, waving placards and squirting holidaymakers with water guns in the latest expression of anger at perceived overtourism in Spain. Under the slogan 'Enough! Let's put limits on tourism', some 2,800 people - according to police - marched along a waterfront district of Barcelona to demand a new economic model that would reduce the millions of tourists that visit every year. Protesters carried signs reading 'Barcelona is not for sale,' and, 'Tourists go home,' before some used water guns on tourists eating outdoors at restaurants in popular tourist hotspots. Chants of 'Tourists out of our neighbourhood' rang out as some stopped in front of the entrances to hotels. Barcelona's rising cost of housing, up 68 percent in the past decade, is one of the main issues for the movement, along with the effects of tourism on local commerce and working conditions in the city of 1.6 million inhabitants. Anti-riot forces gesture as protestors marched through Barcelona's Las Ramblas alley, on July 6 Video showed protestors gathering in Las Ramblas, a hotspot for holidaymakers Protestors squirted water guns at tourists eating in popular spots in the city Rents rose by 18% in June from a year earlier in tourist cities such as Barcelona and Madrid, according to the property website Idealista. For years, the city has worn anti-tourist graffiti with messages such as 'tourists go home' aimed at visitors some blame for the rising prices and shaping of the economy around tourists. The Barcelona protests came after similar demonstrations in tourist hotspots such as Malaga, Palma de Mallorca and the Canary Islands. The second most visited country after France, Spain received 85 million foreign visitors in 2023, an increase of 18.7 percent from the previous year, according to the National Statistics Institute. The most visited region was Catalonia, whose capital is Barcelona, with 18 million, followed by the Balearic Islands (14.4 million) and the Canary Islands (13.9 million). Furious locals who orchestrated mass anti-tourism protests across the Canary Islands earlier this year issued another warning to British travellers this week as they vowed to target 'main holidaymaker areas' over the summer break. Again, they aired their frustrations that not enough had been done to answer their calls. Tens of thousands of people took to the streets of Tenerife on April 20, with roughly 200,000 protesters thought to have taken part in mass demonstrations across the island archipelago. The protests, organised by various groups including 'Friends of Nature of Tenerife (ATAN)' aimed to discourage foreign holidaymakers while also compelling councils to introduce new legislation aimed at protecting the islands from the effects of an ever-expanding tourism industry.
Finextra
2 days ago
- Finextra
UK wealth management platform Stratiphy launches
New personalised wealth management platform, Stratiphy, has launched to empower investors to take control of their investments and to meet their individual goals and risk appetite. 0 By providing everyday investors with access to hyper-personalised and AI-powered investment strategies, Stratiphy offers more control over long-term financial management. It uses automated strategies that respond dynamically to changing market conditions, optimised to seek high performance and low volatility. There is strong demand amongst UK investors to take more control over their investments amidst volatile global markets - eight in ten (77%) UK investors want this functionality whilst the same proportion say the ability to personalise their investment strategy is essential. Stratiphy's automation helps users stay disciplined, avoid emotional decision-making, and focus on long-term goals, even during periods of turbulence. It offers everyday investors an AI-powered investing toolkit that includes the ability to backtest, or simulate historical performance, as well as investment automation. Taken together, this replicates the approach taken by many investment professionals and is presented in a simple and intuitive format for a mainstream audience. The backtest function has been optimised to deliver a realistic 10 year historical portfolio simulation within seconds, demonstrating how a user's personal portfolio would have evolved, providing insight into long-term historic performance. This is designed to make investment decision-making more evidence-based, and reduce barriers to building personal portfolios. Removing barriers to wealth management tools Most people say there are too many barriers to accessing wealth management tools. Two thirds (67%) of people in the UK say that everyone should be able to access investing tools, but that too few people invest as it is seen as too complicated. Nearly half (48%) want help with saving and investing but feel traditional wealth management tools are too expensive. This rises to 69% among those actively considering investing in the future. Stratiphy's model unlocks wealth management for those typically priced out of these services - its subscription-based model reduces cost barriers for retail investors who otherwise would not be able to build personalised investment strategies to meet their goals. Daniel Gold, CEO and Founder of Stratiphy, said: 'Investors are dissatisfied with existing wealth management tools that offer limited control and flexibility. Our platform gives investors the opportunity to create personalised investment strategies – but also the tools to assess their quality through realistic backtests. This level of transparency, accessibility and data insights is a step change in what is available to retail investors. 'We've seen there is huge demand for simple tools that enable people to personalise their investment strategies and create portfolios that meet their long-term goals, whether that is saving for a house deposit, paying off their student loan or building a retirement cushion. 'Our ambition is to help everyone improve their investing potential by providing a personal investment toolkit that manages their investments. This empowers everyday investors to invest like professional wealth managers by unlocking access to AI-driven investment tools and insights.' To support the development of Stratiphy, Daniel joined the NatWest Accelerator which supports entrepreneurs and empowers them to scale their businesses to the next level, through coaching, a programme of thought leadership and events, access to a network of like-minded peers and full-time use of a modern co-working space. Luke Pamflett, Accelerator Community Manager at NatWest in London, said: 'Congratulations to Daniel and the Stratiphy team on the launch of the new app. Throughout his time on the Accelerator, Daniel has shown a commitment to growing his business and being involved in our Accelerator community, and we wish him every success with this new stage of his business journey.' Stratiphy has looked to best in class service providers throughout the development process including: • Factset market data vendor • Utilising CBOE exchange data • NVidia for AI expertise and resources • Stratiphy has raised growth funding with Crowdcube Stratiphy was granted regulatory approval by the Financial Conduct Authority (FCA) in 2024.
Daily Mail
3 days ago
- Daily Mail
St James's Place cuts cash held for customer redress after fees shake-up
St James's Place has reduced the amount of cash it has set aside for a customer redress fund, the wealth revealed on Thursday. The FTSE 100 firm clawed back £85million of the £426million it expected to pay out to compensate customers following complaints over historic ongoing advice charges. It came as SJP revealed net client inflows almost doubled to around £3.8billion during the first half of the year. The group is in the final phase of implementing its new fee structure next month after years of accusations its charges were were opaque and high. On Thursday, the wealth group reiterated that it planned to launch its new new 'simple, comparable charging structure' to be in place from 26 August. As part of the fee structure changes, the separate cost of the financial product, any advice provided and ongoing fund management costs will be split out. The firm's exit charges have also been abolished for new customers. St James's Place had already reduced its initial fee, which is the charge applied when a client first joins up to the firm. This initial fee used to be 4.5 per cent of the wealth being handed over, plus an ongoing charge of 0.5 per cent. From 26 August, a tiered initial fee approach will be adopted. Clients will pay 3 per cent on the first £250,000, 2 per cent on the next £250,000 and a 1 per cent fee on sums above £500,000. The advice charge will be 0.8 per cent, which is higher than previously. The fee saga came to a head in February when the London-listed firm said it had set aside £426million potentially to refund clients who were not provided with the services they should have been. At the time, the business said it had received 'accelerating' levels of complaints from customers in the latter part of 2023, and that it is going to review customer records going back to 2018. In an update on Thursday, St James's Place, said: 'During the period, following the FCA's new industry guidance around ongoing financial advice services, issued in February 2025, the Group revised the redress methodology. 'The Group have updated the assumptions to reflect experience from the project to date, which includes a larger representative cohort of clients.' St James's Place clawed back £85million of the money it expected to pay out to compensate customers for historic ongoing advice charges. The wealth manager said that it had now estimated it to be nearer £320million. St James's Place shares rose more than 7 per cent on Thursday after the group unveiled bumper net inflows. The wealth manager firm saw its net inflows double to £3.8billion in the first half of the year, buoyed by more demand for financial advice and renewed foreign interest in British markets. The London-listed business launched a fresh £63.4million share buyback as its total managed assets jumped to £198.5billon by the end of the period, up from £190.2billion by the end of March. The group recorded a 17 per cent increase in underlying post-tax cash to £240.4million. Mark FitzPatrick, the company's chief executive, said: 'During the period our highly qualified, professional advisers helped over one million clients to navigate a complex macroeconomic environment, ensuring clients' financial plans remain on track for the future. Beyond new business, the first half was a busy period of heavy lifting as we progressed in delivering our key programmes of work. 'We expect our new simple, comparable charging structure to be in place from 26 August 2025, and we look forward to achieving this important milestone. 'Meanwhile, our cost and efficiency programme is proceeding as expected and we are confident in delivering against our plan to take around £100 million out of our addressable cost base3 by 2027.'
