The decision comes as little surprise with many economists predicting the interest rate hold.

John Busby, director, French mortgage specialists Athena Mortgages, comments, “Another month, and as predicted another hold. It’s a prudent decision, as 2010 kicks off with the European economy facing a difficult year.

“Talk of recovery is a tad premature and an interest rate hike would have sent out the wrong message. The worst of the recession may be behind us, but Europe’s economy is not out of the woods just yet. The likelihood is, that with recovery still in the balance, ECB interest rates will remain at 1% until the later part of 2010, with only small incremental rises in 2011.

“With respect to the French property market, despite the strength of the Euro, record low interest rates continue to make it a very attractive proposition at the moment. We are seeing a lot of interest in equity release mortgages and refinancing, with many investors releasing funds from their French property to pay off loans and mortgages in the UK.”

Positive data has emerged from the Eurozone with industrial production found to be growing twice as quickly as expected, however property investors still remain cautious about the future.

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Based in new, luxury offices in Marbella, Spain and within FOC’s headquarters in Guernsey in the Channel Islands, The Fractional Group is the most comprehensive “one-stop shop” for shared ownership. Its team of real estateand investment professionals handle general questions, sales, financing, management, marketing and even furnishing issues.

The Fractional Ownership Consultancy (FOC) is the UK authority on shared ownership. For over nine years FOC has led the way in providing developers with the legal and administrative framework for selling and managing the most successful shared ownership products in Europe.

The Vigia Group’s Parque da Floresta in Western Algarve was the first to sell property in fractions supported by FOC knowhow. The Oceanico Group use FOC’s fractional structure on many of its resorts across Portugal using brand names like Stepping Stones and Prestige Fractional. Acordo adopted the FOC model for its ultra modern homes at Bom Sucesso and Barrasford & Bird have also adopted it for its new project in Samos. Today FOC’s fractional portfolio spans well known resorts in Spain, Portugal, Greece, Cyprus the US and the UK.

The Fractional Group is now offering an even wider range of exclusive, luxury properties built by some of Europe’s largest and most trusted developers.

CEO of Fractional Ownership Consultancy Jerry Cobb says: “Clients as diverse as Taylor Woodrow Espãna and AquaPura in the Douro Valley show that The Fractional Group is dedicated to bringing the consumer the very best investment and leisure products in every price range. FOC’s unrivalled knowledge of the fractional property market and our sales pedigree is encouraging many more developers to sign up with us. Just watch this space.”

The first of many developments to be launched by The Fractional Group will be the Alhaurin Golf Resort on the Costa del Sol. Fractions start from just €25,000 for a 12th fraction (4 weeks use per year) and owners can play free golf at a variety of courses as part of the purchase. There is 100% financing available to purchasers subject to status.

For further information, please visit www.thefractionalgroup.com and www.fractional.net or contact:
Kerry Clark, Tideway Communications, 020 8878 0787
kerry@tidewaycommunications.com

Wayne Piercey, The Fractional Ownership Consultancy, 01481 747803
wayne.piercey@fractional.net

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In anticipation of the scrapping of the tax, funds that would otherwise make their way into the UK residential and commercial property market are already being earmarked for investment in France. French property will not only provide added portfolio diversification for offshore investors but, with the investments being Euro-denominated, a currency hedge. France also offers a wider range of properties to investors than the UK, such as alpine ski resorts and vineyards, which are bound to appeal to offshore investors.

The Pierre & Vacances Group, a listed French tourism property developer and manager, has seen a sharp rise in enquiries from the three offshore territories since the beginning of the year, as investors brace themselves to move once the tax is scrapped.

“This seemingly small tax change is already big news in the investment community, with many private and corporate investors approaching us in advance of January 1″, says Nick Leach, Head of Pierre & Vacances Property Investments, UK & Ireland. “Suddenly, a big reason for not investing in France will be removed and the effect could be dramatic as more and more investors catch on.”

David Anderson, a chartered tax adviser at London-based Sykes Anderson Solicitors, adds: “The removal of this tax on 1 January will have a very positive effect on the French property market, specifically investment property, but could have a very negative effect on parts of the UK property market. From the New Year, a pool of capital in the Crown Dependencies will, for the first time, be able to flow, uninhibited, into France, with quality French property in good locations likely to do particularly well. So far, this looming tax change has passed largely under the radar, but even before its implementation it is already beginning to change investor mindsets. We have already exchanged contracts for several channel island investors on high value French properties, who are aware exclusive French properties will soon be harder to acquire as more wealthy buyers enter the market.”

About Pierre & Vacances
The Pierre & Vacances Group has been designing, developing and managing holiday homes and apartments for 40 years, anticipating European property and tourism trends. The Group’s development strategy has led to the acquisition of Center Parcs Continental Europe, Europe’s number one provider of short breaks. Pierre & Vacances takes a visionary approach to the world of holiday accommodation, and, since the birth of the Avoriaz development in 1967, has continued to grow in France and throughout Western Europe. The undeniable market leader in residential tourism, the Pierre & Vacances Group has developed a complete range of short and long stay holidays, with a choice of hotel and leisure services designed to meet every requirement of today’s European consumers. With a presence in France, Northern Europe, Italy and Spain through its three main brands – Pierre & Vacances, Center Parcs Europe and Maeva – the Pierre & Vacances Group occupies, with a turnover of 1.5 billion euros, an unparalleled position in the European tourism industry. Pierre & Vacances in numbers:

• A tourist network of 50,000 apartments and houses
• 230,000 beds – by the sea, in the mountains, in the countryside, and city centre
• 8 main brands: Pierre & Vacances, Center Parcs Europe, Maeva, Latitudes, MGM, Adagio, Senioriales, Citea
• 6.9 million customers per year
• 8,500 employees
• Annual turnover €1.5 billion

Since launching the “Nouvelle Propriété” in 1979, Pierre & Vacances has offered private investors the opportunity to enter the lucrative real estate rental market by becoming a freehold owner of a holiday property with a leaseback. The Pierre & Vacances Group is quoted on the Paris Stock Exchange and is a member of the SBF 120 (French equivalent of the FTSE100).

About Sykes Anderson Solicitors
Sykes Anderson is a niche tax and commercial tax and property law firm in the City of London with Commercial, Litigation, Property and International Tax departments. Founded in 1989, our clients are mainly wealthy individuals and entrepreneurs.

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Property and real estate investment turnover in Central and Eastern Europe was around 220 million Euros, a third of the amount that was turned over in the last three months of 2008. The major issue appears to be a lack of liquidity of funds- with investors struggling to fine mortgages, the property market in Europe has stagnated.

Most of the investment property transactions took place in Russia and the Czech Republic, with much of the property being commercial (offices and hotels etc) rather than residential properties. Several high quality commercial buildings are expected to be put on the market later in the year across several countries therefore there is hope that the market will pick up towards the latter end of 2009, although the levels of foreign property investment are not expected to rise to 2008 levels, mainly due to the global recession and financing issues.

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