Ferdinand Posted January 18, 2017 Share Posted January 18, 2017 (edited) Just a heads up for people looking to invest money. Kevin McCloud's company HAB have a 5 year investment bond open at 8% AER at present. Usual caveats ... capital at risk, not covered by protections cheme etc. Here: https://www.habhousing.co.uk/news/initial-crowd-fund-target-smashed-in-4-days Ferdinand Edited January 18, 2017 by Ferdinand Link to comment Share on other sites More sharing options...
SteamyTea Posted January 19, 2017 Share Posted January 19, 2017 Would be interesting to follow this one for the next 5 years. Link to comment Share on other sites More sharing options...
Temp Posted January 19, 2017 Share Posted January 19, 2017 (edited) Perhaps I'm wrong but 8% sounds high for a property backed loan. Couldn't he borrow at lower rates from a bank? Edited January 19, 2017 by Temp Link to comment Share on other sites More sharing options...
daiking Posted January 19, 2017 Share Posted January 19, 2017 Would not touch with a stolen... Link to comment Share on other sites More sharing options...
SteamyTea Posted January 19, 2017 Share Posted January 19, 2017 Possibly, but this way they only pay out at the end, so if inflation rises, then it may be cheaper. Without looking into it more, and I cannot be bothered, is it offering 8% a year, or 8% on your total investment after 5 years (1.6% before compounding)? Link to comment Share on other sites More sharing options...
Temp Posted January 19, 2017 Share Posted January 19, 2017 8% per year tail loaded.. https://www.codeinvesting.com/investment-opportunity/?cbid=HABLand By way of example, a UK Basic Rate tax payer, investing £10,000 on or before 15 February 2017 and holding investment for 5 years would receive gross interest at each of the ends of years 1 and 2 of £700, on which £140 tax would be due. She would receive gross interest at each of the ends of years 3 and 4 of £800, on which £160 tax would be due. Link to comment Share on other sites More sharing options...
ProDave Posted January 19, 2017 Share Posted January 19, 2017 AER= ANNUAL Equivalent rate, so they are expecting 8% each year or 40% over the term (not allowing for compounding) Why am I suspicious of this? Icelandic bank anyone? Link to comment Share on other sites More sharing options...
Guest Alphonsox Posted January 19, 2017 Share Posted January 19, 2017 Saving money with icelandic banks turned out to be entirely risk free thanks to the UK taxpayer. I would be a lot less sure of this. Link to comment Share on other sites More sharing options...
Ferdinand Posted January 19, 2017 Author Share Posted January 19, 2017 (edited) 3 hours ago, Temp said: Perhaps I'm wrong but 8% sounds high for a property backed loan. Couldn't he borrow at lower rates from a bank? I do not think it is property backed. It is finance for land acquisition and upfront expenses. Not sure if it is a good return, however they have something of a track record and no scandals related to the previous cash raising they did in 2013 afaik. It is not clear whether this comes within your £1000 tax free allowance for interest. Ferdinand Edited January 19, 2017 by Ferdinand Link to comment Share on other sites More sharing options...
newhome Posted August 23, 2019 Share Posted August 23, 2019 Oops! https://www.theguardian.com/tv-and-radio/2019/aug/22/investors-kevin-mccloud-property-schemes-huge-losses Link to comment Share on other sites More sharing options...
Ferdinand Posted August 23, 2019 Author Share Posted August 23, 2019 (edited) 2 hours ago, newhome said: Oops! https://www.theguardian.com/tv-and-radio/2019/aug/22/investors-kevin-mccloud-property-schemes-huge-losses This is the Guardian headline: Quote Investors in Kevin McCloud's projects told they face huge losses And this is standfirst and the 2 key paras of the article: Quote Small investors who sank millions of pounds into the TV property guru Kevin McCloud’s eco-friendly housing ventures have been told they could face losing up to 97% of their money. ..... McCloud has repeatedly turned to the public to help fund a series of eco-friendly developments. In 2013, HAB Housing reportedly broke the then world record for crowdfunded investment with 650 people putting in £1.9m. Then came the January 2017 mini-bond scheme, which raised £2.4m for HAB Land. Later that year, McCloud announced that he was looking to raise up to £50m through another bond for private investors. During the past few days, the January 2017 bond investors have received a letter from HAB Land Finance which stated that “after final completion of the projects at both Kings Worthy and Cumnor Hill [in Oxford], the net return available to bondholders would be expected to range from £606,000 (best case) to £69,000 (worse case) which, in each case, is equivalent to 26 pence and 3 pence for every £1 of bond monies invested”. So they would either lose 74% in the best case, or 97% in the worst case. As a result the company has proposed a restructuring of the bonds whereby investors would not see any of their cash back until 2024 at the earliest. Can one of our financial gurus confirm that a "net return" of a bond incorporates the value of the original capital, so that these returns are indeed all that is left? There seem to be several definitions of "net return" around. Cheers F Edited August 23, 2019 by Ferdinand Link to comment Share on other sites More sharing options...
SteamyTea Posted August 23, 2019 Share Posted August 23, 2019 Isn't Net Return what you get back after all gains, losses, costs etc are calculated. So it does include your original investment. Think it is usually called Total Return. I think these would be a B on the credit quality rating. Link to comment Share on other sites More sharing options...
MrSniff Posted August 23, 2019 Share Posted August 23, 2019 (edited) Net return is after deduction of costs, commissions and usually taxes. It would normally be used to refer to net return on capital, so excluding the repayment of principal. In this case, I agree with @SteamyTea's interpretation that to me this really looks like total return such that not all the principal would be repaid. Parts of the HAB Mini Bond page on the debt platform seems to imply in a couple of places that 100% of the principal would be returned, but to be fair there is also a warning that there is no guarantee of this. The FCA has a page on mini bonds https://www.fca.org.uk/consumers/mini-bonds. Not something I would go for - the higher headline (unguaranteed) return reflects the higher risk. Edited August 23, 2019 by MrSniff Link to comment Share on other sites More sharing options...
ProDave Posted August 23, 2019 Share Posted August 23, 2019 I am glad I did not bet my pension or house build fund on this scheme then. Link to comment Share on other sites More sharing options...
Barney12 Posted August 23, 2019 Share Posted August 23, 2019 6 hours ago, MrSniff said: Net return is after deduction of costs, commissions and usually taxes. It would normally be used to refer to net return on capital, so excluding the repayment of principal. In this case, I agree with @SteamyTea's interpretation that to me this really looks like total return such that not all the principal would be repaid. Parts of the HAB Mini Bond page on the debt platform seems to imply in a couple of places that 100% of the principal would be returned, but to be fair there is also a warning that there is no guarantee of this. The FCA has a page on mini bonds https://www.fca.org.uk/consumers/mini-bonds. Not something I would go for - the higher headline (unguaranteed) return reflects the higher risk. From the Observer: Investors in both the equity crowdfunding scheme and the mini-bond are now expected to take large losses due to the company running into significant trouble. Losses for investors are expected to be between 74% and 97% of the principal amount invested. Link to comment Share on other sites More sharing options...
Temp Posted August 23, 2019 Share Posted August 23, 2019 Loosing that large a percentage on a property investment takes some doing. Especially in the housing market. All becomes clear when you realise the money was invested in a house building company not houses directly. Link to comment Share on other sites More sharing options...
Crofter Posted August 25, 2019 Share Posted August 25, 2019 This made me chuckle: https://www.thedailymash.co.uk/news/celebrity/kevin-mccloud-over-budget-living-in-caravan-and-pregnant-20190823188449?fbclid=IwAR3osgx3IdXoPDJoniPIIfXa5V3xjXbMUsKhnaQtTtjkITzPbeWFPvzzBPg 2 Link to comment Share on other sites More sharing options...
Temp Posted August 25, 2019 Share Posted August 25, 2019 (edited) +1 Especially this bit.... Quote He said: “Well, there were always going to be a few bumps in the road, but I’m still confident we’ll be in by Christmas. “We just need to do the roof, the walls, the windows, all the electrical fitting, the bespoke bentwood spiral staircase has to be shipped from Germany and lifted in by crane, and the entire exterior needs to be hand-tiled while I apply for retrospective planning permission. Edited August 25, 2019 by Temp Link to comment Share on other sites More sharing options...
PeterW Posted October 16, 2019 Share Posted October 16, 2019 So it looks like it’s gone into liquidation then https://apple.news/Al_Ti2iuDTueCzWptE8z0QA Link to comment Share on other sites More sharing options...
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