Blackmore

Blackmore Overview

To label Blackmore an investment company would be a mistake: the group consists of two separate entities; Blackmore Homes, a house-builder and property development company; and Blackmore Bonds, the investment arm.

The firm has ambitious plans for expansion, given the acquisition of a new London office in April of this year and the appointment of Ricky Poonia, former Head of the Residential Capital Markets & Investment team at BNP Paribas, and is clearly looking to grow its property portfolio rapidly. Indeed, CEO, Patrick McCreesh, has stated that the firm intends to break into the top five of UK housebuilding firms in the next five years.

With so much exposure to the property market, it makes commercial sense that the business also operates into the IFISA niche.

Effectively, investors lend money that Blackmore then invests in its property development schemes, building new homes and converting period properties into apartments to sell on at the profit.

Customer service

The company’s websites clearly differentiate between the property development business and the investment offering, making it easy to navigate and find the information you require. The fact that there’s only two (relatively simple) product offerings helps also, as well as the informative charts outlining potential returns of both products.

The company commands a five-star rating on Trustpilot with most customers saying that the investment process is straight-forward and the company is easy to deal with. And, sure enough, the initial application process shouldn’t take more than about five minutes.

The stats

Should You Invest in the Blackmore Fixed-Rate ISA Bond?

As previously mentioned, the two options available to investors are refreshingly simple. Both are fixed income products offering 7.9% or 9.9% with interest paid quarterly. Essentially, these are bonds, but when held in an IFISA account, attract all the statutory tax benefits. The rates are fixed hence they will not fluctuate with market conditions. This is a feature which is proving to be attractive at a time when Brexit is causing market uncertainty.

Blackmore currently have 13 projects in development comprising 228 units. Four of the sites are nearing completion and have show homes which are open for the pubic to view. 40% of the entire portfolio has now been sold subject to contract.

The projects range in size from small to midscale developments. Funds required to complete a project are ring-fenced at the outset in an SPV – so a project cannot run out of cash.

The locations are countrywide with projects in Manchester, Birmingham, London and as far south as Devon.

Blackmore have an experienced investment committee which reviews each potential site checking it against a strict criteria, they have rejected 352 sites before finding the 13 that are currently being developed, this gives you an idea of how selective the committee are.

Security

The firm claims to be highly transparent when it comes to their products and ‘insists that investors read the risk factors before investing’. Investing in Blackmore carries a higher degree of risk than investing in high street banking products and as such investors should be aware of the potential for risk.

However, an independent security trustee is appointed to monitor the investments and enforce security. In the event of a default, this trustee will take over the firm’s assets and divide them between investors. Bolstering this is the Capital Protection Scheme – not to be confused with the FSCS – which is a policy provided by a private insurer to cover investors capital in the event of insolvency.

Of course, your capital is still at risk with these types of investments, but, in this instance, the firm’s financials (and business model) look solid and plans for growth look realistic. Unless there’s a significant downturn in the market, there are no signs to indicate that the company will not realise its ambition to become a major housebuilder in the UK market, given an experienced management team and an innovative business model.

The Blackmore Group is not regulated by the Financial Conduct Authority (FCA) and your capital is not protected under the Financial Services Compensation Scheme (FSCS), but, to date, no investors have lost money and the company have not defaulted on any payments.

Conclusion

The investment products offered by Blackmore are very straightforward and should appeal to this looking for a simple product with guaranteed rates of return. Regular quarterly payments will also be attractive for those looking for a regular source of income from their investment.

But what’s really interesting about this offering is the fact that you get to invest in housebuilding. With the UK set to need many more residential homes over the next decade at least due to an expanding population, it’s hard to see how Blackmore’s business model can fail. Given the reasonably low levels of risk, this looks to be an attractive investment opportunity with good rates of return.

Originally Published: Tuesday, November 27th, 2018
Updated: Wednesday, December 5th, 2018

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