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Expats invest for “holidays back home” September 2007

Find out how hundreds of ‘Brits abroad’ are enjoying rent-free accommodation on their native soil - thanks to a unique property-based method of investing in holidays…

HPB (the Holiday Property Bond) was established – almost a quarter of a century ago - to offer British holidaymakers access to high quality holiday properties, at premier European destinations. How things change.

Nowadays, through a Gibraltar office, the Bond is equally likely to attract visitors to the UK – in the form of overseas residents wishing to take advantage of nearly 500 Bond-owned homes throughout Scotland, England and Wales.

HPB Director Nicholas Beamish explained: “The Bond enables our expat-investors to return home as often as they choose, without imposing upon the friends and family members that they come to visit.
“By staying rent-free at properties in which they have a financial interest, they maintain their independence. And because they have access to the entire HPB portfolio, they’re able to enjoy split-breaks, too, at a number of different locations.”

Beamish continued: “The ubiquity of low cost ‘no frills’ flights, combined with a modest upfront investment [which starts at just £4,000], makes HPB a highly attractive proposition, whether Bondholders are planning a long stay – perhaps to spend quality time with the children or grandchildren – or they’re just popping back to see old friends.”

In this respect, the Bond is quite unlike traditional timeshare: investors are not restricted to a particular location or time slot. Instead, they may choose from, amongst others, a castle in Wales, a former farm in Devon, a converted Highlands hotel, which once entertained Queen Victoria, and David Niven’s old boarding school – now extensively refurbished – on the Isle of Purbeck, Dorset.

“The Bond combines the economies of shared ownership, with the flexibility of property rental,” continues Beamish. “And because it is a capital asset, with a value quoted every day in the national press, it can be passed on to the children, too.”

Exotic
Bondholders benefit from a choice of 14 gloriously rural UK locations – from The Highlands to The Cotswolds. Braithwaite Court, for example, is set against a dramatic mountain backdrop, just a few minutes from Derwent Water - making it ideal for those wishing to explore the perennially popular Lake District National Park.

By contrast Barnham Broom, in North Norfolk offers a prestigious country club environment, overlooking the fairways of two championship 18-hole golf courses.

Other popular destinations include the North York Moors, the Peak District, Cornwall, Dorset and the North Downs of Kent, the garden of England.

Allocation of all of these properties and those outside the UK is by means of an innovative system of ‘Holiday Points’: each £1 invested entitles the Bondholder to one Holiday Point per annum. Points are renewed each year, and adjusted in line with changes in the cost of providing additional accommodation – which means investors’ ‘holiday booking power’ is protected in perpetuity.

Beamish explains, “Holiday Points are usually reviewed every six months, with advice from independent valuers. They are then increased or decreased to reflect the cost of providing additional properties for new investors. This provides a useful hedge against inflation, ensuring that the value of holiday entitlements is maintained”.

Diversity
The Bond’s stable of European homes is equally diverse, including as it does a French chateau and Italian trulli, an ancient palazzo in Tuscany and an entire hamlet in The Dordogne. A larger family resort – in Almeria, Spain - is scheduled to open within the next couple of years, joining sunshine locations such as the Canary Islands, Majorca and Madeira.

Bondholders also benefit from Points-free access to a further 300 villas, in 45 locations – including South Africa and North America – under HPB’s Tenancy programme.

“The choice of locations is far from opportunistic,” explained Beamish. “In fact, it’s driven by the Bondholders themselves. They help us to shape how the portfolio is developed - voting for the areas into which they’d most like us to expand. In this way, we ensure each new site reflects their preferences.

“This goes some way to explaining why our investors have remained with us for so long – in many cases, for over two decades.”

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Judy Almond, herself a Bondholder for over 20 years, echoes Beamish’s sentiments. She said: “The real bonus for me has not just been the vast increase in properties available, but the knowledge that if I book an HPB property it will be of a certain high standard, both in terms of the equipment, furnishings and cleanliness.”

That consistency of accommodation is equally important to Andrew and Rose Gowans. The couple invested in the Bond in 1989. Rose says, “HPB represents everything that is good about choosing a vacation destination: you know the quality is going to be there even before you arrive.”

Each site provides a comprehensively stocked, and free-to-use, film and book library, together with, usually, a swimming pool, sauna, tennis court, snooker room and children’s play area. Many also offer pitch-and-putt, bowling greens and croquet lawns. Two have 18-hole country standard gold courses. One has its own fishing lake.
There’s even an HPB salmon fishing beat in Blairgowrie, in the heart of Scotland.

Safeguards
Structured as a life assurance bond, the Bond has net fund assets totalling more than £220 million. It is debt-free. As with any investment, the value of the fund fluctuates and formal valuations are issued monthly. However, the majority of Bondholders are not seeking short term financial gain - rather, they are interested in long term holiday benefits.
The Bond management team’s confidence in delivering those benefits is reflected in a unique Holiday Satisfaction Guaranteed offer, which allows new investors to cash-in their Bond for their unit value (which may have gone up or down), and receive a full refund of their initial charges if, within 14 days of return from their first holiday at a Bond property (anytime within the first three years), they should not be completely satisfied.

Privileges
The minimum initial investment into a Holiday Property Bond is £4,000 – little more than the cost of a single holiday for many families. Bondholders have the option to increase that investment – and thus, their annual Points entitlement - at any future date.

To maximise occupancy, short notice breaks are promoted regularly – these are made available to Bondholders on a Points-free basis. Bondholders who are unable to utilise their Points in any given period are able to pass their entitlement to their family, friends and colleagues.
Other privileges of Bond ownership include access to the HPB Travel Club, a wholly owned ABTA bonded travel agency that will, if required, arrange Bondholders’ entire trips – from airport parking and low-cost flights, to transfers, taxis and car hire.

The Bond also runs an annual programme of Points-free special interest holidays featuring golf, tennis, bridge, bowls, walking, cycling, painting, choral singing and many other ‘themes’ - all of which are suggested by the Bondholders themselves.

Lifetime appeal
“Of course, organised affairs such as these do not suit everyone,” said Beamish. “They do, however, highlight the range of opportunities that are available.

“Younger holidaymakers prefer to do their own thing – taking advantage of more family-friendly or ‘activity-oriented’ resorts and country club style destinations. Others favour our more sedate retreats. This is what the Bond is all about.

“At the outset, our goal was to develop a holiday product with ‘lifetime’ appeal. In developing such varied – yet unashamedly exclusive - sites, we feel we’re able to offer something for everyone, at every stage of their lives. We’re now re-focusing our development plans on the UK.
“Our new Shropshire home is close to completion. We’ve applied for planning consent on a glorious grade II Listed Victorian mansion overlooking Grange Over Sands. And we’re looking at prospective sites in Northumberland – a region that attracted a large percentage of the vote in the most recent Bondholder poll.

“We’re confident that all three locations will prove extremely popular – not least amongst the many expats who’ve come to rely on us to offer their UK holiday ‘homes-back-home’.

”For more information on the Holiday Property Bond, telephone Gibraltar (+350) 77 988. Or browse the Bond’s property portfolio online at www.hpb.gi