The Holiday Property Bond began life in 1983 with no track record and only limited funding. It owned no property. Nor did it have any investors.
The central tenets of HPB were, and are:
- to link the sum invested to the level of holiday entitlement that could be enjoyed
- to allow use of any HPB properties with no exchange fees
- to connect the investment with the underlying value of the properties and other assets, and
- to provide a right to encash at a price reflecting the value of the HPB fund assets.
It soon became clear that such a concept could only be realised by using a life assurance bond as a vehicle. An Isle of Man life assurance company agreed to act as the issuer, on the proviso that a member of an independent banking group would act as trustee and control all the HPB fund assets.
HPB never borrows money; new properties are not bought or developed unless or until the funds are in place to do so.
What this meant, initially, was that investors ("Bondholders") had to be persuaded that the idea was worthwhile before the first property could be bought. No easy task, but during that first year HPB attracted enough investment to buy its first property - an apartment in the Canary Islands.
HPB now has net assets of over
£250 million and more than 40,000 investors. It continues to expand: , a Grade II-listed Victorian house in Grange-over-Sands, Cumbria, was fully opened in October 2012; plans are being finalised for a development at Lucker Hall, near Bamburgh, Northumberland; additional land at Physkos is to be developed; in Shropshire is to be enlarged and enhanced; and the list goes on.
With locations selected through regular Bondholder ballots and in consultation with the Holiday Property Bondholders' Committee - an elected body to which HPB's management must justify its actions on a regular basis - we ensure that the Holiday Property Bond is fully responsive to Bondholders' wishes. The locations in which we buy, and the properties we develop, are very much at the Bondholders' behest. Judging by HPB's success since 1983, and our continued growth, it is an approach which serves us - and our Bondholders - well.
For an explanation of the Holiday Property Bond see "How it works".