Will the 'new normal' make co-ownership an attractive option for second home buyers?
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There is much talk of what the 'new normal' will be as we start to see restrictions lifted on domestic and foreign travel.
One thing is certain, the global pandemic has created a change in the mindset of many property buyers. As was seen after the 2008 downturn, we have seen, at least for a period, a shift in overall consumer attitude and behaviour and a movement from a ‘spend’ to a ‘save’ society.
As part of this adjustment, buyers will be more savvy, discerning and cautious about how they spend their money. But how will this affect the second home market in the UK and Europe and will it lead to an increase in interest in fractional ownership?
The events of 2020 and 2021 will not change the aspiration or wish of many to own a holiday home. It may however lead them to reassess their financial and lifestyle priorities. This is where co-ownership may be seen as a realistic and viable option, particularly for the most important group of fractional buyers – those who can afford to buy a second home outright but see sense in paying a sum that matches their actual use of the property - and sharing the costs with a few other like-minded individuals or families.
As there is likely to be a significant fall in long haul airline travel in the short to medium term as people want to limit the time they spend at airports and on planes, many Europeans will look to stay closer to home for their holidays with less travel to Asia and North America.
As well as a desire to travel shorter distances, there may also be a preference for shorter but more frequent breaks. That would create the perfect background for fractional ownership to develop - 2 key requirements for a successful fractional are that the property is in a location which owners will want to visit several times each year and the property is reasonably accessible, ideally no more than 2 hours flying time.
For those interested in fractional ownership in the UK (see our article on this topic here), the staycation trend which has been growing for several years now on the back of a weak pound and Brexit concerns may help grow fractional ownership further in the UK with shorter but more frequent visits to the Lake District, the South West, Scotland and London (please also see our article on portfolio ownership here). We also expect interest in fractional lodge ownership in the UK also looks set to grow as an attractive option - see our article on luxury lodge ownership here.
Please let us have your thoughts on the 'new normal' and how this will affect your financial and lifestyle choices, we would love to hear from you.
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