• What is a Timeshare?
  • Types of Timeshare
  • How much does a timeshare cost?
  • How do timeshares work?

    • What is a Timeshare?

      Timeshare means buying the right to spend a specified period in a holiday property each year for three years or longer. It is not the purchase of a share in freehold property a fact that has long term ramifications on the Value of a purchase. Note the three year period this is important because any less and you are not protected by the limited although growing timeshare regulations in place.

      A major attraction of timeshare and the promise upon which it is sold, is the value for money and investment it is supposed to provide. The accommodation which usually has access to quality leisure facilities, is held in trust (or registered in a public register) for the lifetime of the right to use. So, provided that the owner continues to pay the annual fees( see below) on time, they can get quality holidays every year of a known standard at below market rates for rented property or hotels. Once the owner is tired of timeshare they can sell their rights on to someone else.

      Well run and successful resorts are often run by the timeshare owners through a club and a management committee. This ensures that owners have a say and can get what they were originally promised and that annual fees are kept to a reasonable minimum.

      It is estimated (timeshare consumers association) that over six million families own a timeshare worldwide. Many are well satisfied with their ownership and have had great value over the years.

      Unfortunately, due to an initial lack of regulation and the actions of dishonest traders across the industry, the concept of "timeshare" has lost credibility with the general public resulting in the industry trying to disguise products by claiming they are not “timeshare”. As a result over the years a growing number of owners have become disillusioned with their purchase. Unfortunately current property markets and the tainted name of the industry mean that the market demand for timeshare is now so weak that existing timeshare owners are having great difficulty getting rid of their ownership. Many timeshares and point systems are now totally worthless as nobody wants to buy them.

      Types of Timeshare

      Timeshare accommodation ranges from studio apartments to villas with three bedroom, three bathrooms, lounge, Dining quality tends to range between 3-5 Star and is usually of a higher standard than hotel or rented accommodation.

      When you buy timeshare you pay a one off payment for the right to use and, each year, a fee which pays for the accommodation. to be kept clean, in good order, local taxes paid etc.

      Most timeshare resorts are linked to an exchange organisation that offers to arrange exchanges with owners in other resorts. There are nearly 6,000 resorts in all the popular destinations worldwide to exchange with.

      Timeshares are also known as ‘holiday clubs’, ‘destination clubs’ and ‘vacation ownership’, to avoid the stigma that has grown up around timeshares. ‘Fractional ownership’ is a term that has also (incorrectly) been used to describe timeshares, this term should in reality only be used where there is ownership of a share of the freehold of the property.

      How much does a timeshare cost?

      Genuine timeshares can offer good value, but prices vary dependent upon week, resort, country, economic climate, size and standard of apartment. A small studio in the Canaries, Spain or Portugal can cost less than £2,000, whilst a five-star apartment in an exclusive resort during peak season could cost up to £10,000.

      Large Multinational corporations such as Marriott have begun to offer ‘holiday ownership’ plans. In such plans, you could buy a two-bedroom apartment for one week a year in a peak season for 80 years for about £15,000. This is a timeshare arrangement you do not own a share of the physical property.

      You must also pay an annual fee for the management and upkeep of the property. This can vary from £200 to well over £700 a year for a week of ownership. One of the key factors in the disillusionment of owners is increasing upkeep charges with no corresponding benefit or improvements in service or value.

      How do timeshares work?

      Timeshares can operate in different ways.

      * In the ‘fixed week’ system you own rights to a specific week, usually in a specific apartment/villa which you can either return to every year or swap through an exchange system for something similar in another part of the world and in another time period. These systems can appear very attractive on purchase but in reality booking an exchange can prove very difficult if you have specific location and week requirements.
      * In the ‘Points clubs’ (also known as the floating system) you own a week or longer, within a season and each year you have to book the specific week that you want, subject to availability. However, you can often accrue your points if not used and then use the additional points to upgrade or buy additional weeks in a year.

      What are Holiday property bonds?

      These schemes work by investing money in a portfolio of properties. Three-quarters of your investment usually goes to purchase the property, the rest is used up by admin and management fees. In return for this investment you are allocated points. Properties are categorized by popularity, quality, resort and a value allocated in points to weeks. Provided that you have enough points you can stay in one of the properties offered by the property bond company,( if its available).

      The points should also be able to be cashed in after a fixed number of years. Whilst usually a better investment than a traditional timeshare (no property asset just a right to weeks) they are not risk-free, because as with any property investment values depend on the value of the underlying properties. One significant issue for a purchaser is that property bonds are regulated by rules governing investment products, not timeshare regulations.