What is The Holiday Property Bond (HPB)? We have all seen for decades its intriguing advertisements in magazines, often fronted by cheery Sue Barker or Judith Chalmers.
The HPB is a bit like a time share but more flexible and less prone to bad press. If you have a sense of value, like luxury holidays, and have some spare capital, the bond could be worth considering.
Thinking about the summer holidays? For some people owning a villa abroad – in France in particular – is not as straightforward as it was, so this less committed property bond could reduce the hassle of owning and hiring holiday homes. The bond enables you to stay in beauty spots throughout the UK and Europe – in 13 different countries in all.
For a one-off payment, averaging around £13,000 (the minimum is £5,000), and a high-ish initial charge, the consumer buys what is technically a life assurance bond. These bonds give ‘points’ each year which enables the holder to choose one or several weeks’ holiday in a villa, cottage or apartment, or save for a posher billet the next year.
HPB says that the bond holder stays at a villa or apartment rent free, but they do have to pay a ‘non profit’ £350 per week (for a two bed accommodation), to cover the week’s running expenses. The alternative to think about is that if you hired an apartment online would you pay this extra sum which over two weeks would be £700 with HPB? However, you would be getting more with HPB and the charge is necessary to make the venture work, apparently, and it is pitched low enough not to put people off unduly.
A different sort of investment though it may be, the HPB has been going a long time – since l983. Over the years the management have collected over 1,300 wholly-owned properties in 30 locations in the UK and Europe, tailor-made to delight the discerning British holiday maker.
The proof of the pudding is in the eating and it seems the deal does appeal to a lot of people – there are 40,000 HPB holders in the UK. They tend to be from the professions, with the largest group being company directors. Over 40 per cent of new bond holders have been introduced by other bond holders.
The CEO of HPB Management, James Boyce, says that people buy these holiday bonds because, like Sue Barker, they want ‘surety of quality’ on holiday. They don’t want to be disappointed when they fetch up in a rented villa in Spain or Italy for two weeks costing £1,000 upwards a week. The idea is that HPB delivers on quality and is price aware.
There is a “Money Back Promise” where you can encash the HPB investment after holding it for two years, at a value linked to related properties and securities. According to the management, less than two per cent a year do this. Almost half of bond holders go on to increase their original investment.
The bonds are inflation protected, so if you bought a bond in 2000, for example, you don’t lose out. You can share the bond with your family and friends and you can also pass on your bond in tact to your children.
The HPB has a property portfolio worth E265 million, it has no borrowings. On this basis it seems unlikely to go bust but it could change management and things could go awry. HPB’s assets are controlled by an independent trustee, HSBC Trustee (Guernsey) and it’s regulated by the UK Financial Conduct Authority. The bond does have an Isle of Man protection scheme.
Privately owned HPB Management, based in Newmarket in Suffolk, juggles the properties and accommodation scheduling, and in consultation with bond holders, opens new properties each year.
In fact HPB has just bought Gloucestershire-based Rural Retreats which has 350 properties in the UK. It also set up Lanterns and Larks this year, offering upmarket camping holidays.
Something for the garden . . .
A website for self reliance, permaculture.co.uk, has some helpful reminders about saving seeds this summer.
The easiest to do are the dry ones like peas. Choose pea seeds from successful plants and wait until they get really ripe before removing them from the pod.
Label seeds carefully, says the website, with the vegetable, variety and year of harvest. Store in paper bags in cool, dark conditions with a stable, above freezing temperature, and away from mice.