River Thames, London

INVESTOR FAQs

THE COMPANY

What makes HomeNow different to traditional Buy to Let?


There are some significant differences between HomeNow and the traditional buy to let rental model:

  • HomeNow tenants find the property they want to call home. They choose this in the same way as if they were buying the property themselves.

  • Five year term – unlike many tenancy agreements, which are renewed periodically, HomeNow commit to a five year term. This means tenants receive absolute security of tenure without the prospect of having to move in the event the agreement is not extended.

  • Monthly rent is fixed for five years: HomeNow tenants benefit from financial security without unforeseen rental increases.

  • The potential for earning equity in the property they rent: HomeNow tenants receive one third of the increase in value over the five year period in the event the property increases in value and they comply with their agreed responsibilities.





INVESTMENTS AND THE LEGAL STRUCTURE

What makes HomeNow different to traditional Buy to Let?


There are some significant differences between HomeNow and the traditional buy to let rental model:

  • HomeNow tenants find the property they want to call home. They choose this in the same way as if they were buying the property themselves.

  • Five year term – unlike many tenancy agreements, which are renewed periodically, HomeNow commit to a five year term. This means tenants receive absolute security of tenure without the prospect of having to move in the event the agreement is not extended.

  • Monthly rent is fixed for five years: HomeNow tenants benefit from financial security without unforeseen rental increases.

  • The potential for earning equity in the property they rent: HomeNow tenants receive one third of the increase in value over the five year period in the event the property increases in value and they comply with their agreed responsibilities.





THE PROPERTIES

Can HomeNow seize the underlying assets?


Deeds for all properties are in the name of the underlying, segregated company (SPV) and held by the bank providing the additional, required financing. Income received from the tenant is paid to the segregated company and not the HomeNow investment manager who manages the fund.

HomeNow investment manager is subject to regulation by the Financial Conduct Authority and is not authorised to hold client money.




What happens to the investment if HomeNow experiences financial difficulty?


All investment funds are held in companies (SPV) entirely segregated from the assets of the investment manager. If HomeNow were to experience financial difficulty, there is no recourse to the underlying funds (SPV) and an alternative manager will be sought.




What are the risks/rewards of geared/leveraged investments?


The use of gearing/leverage enhances investor returns by increasing exposure to property price movements. This can be viewed as a positive in a market where property prices are increasing, but it will mean investors will see greater losses if the market falls. This is very common with property investment where banks provide a Loan to Value (LTV) of the value of the property.

The underlying SPV LTV will not exceed 65% of the value of the property.




What happens if a decline in property values result in a realised loss for the investor after five years?


In the event the value of the properties in the underlying funds, including initial costs and property price movement results in a capital loss for the investor, the following will apply:

  • The tenant will not be automatically allowed to purchase the property.
  • The fund will mature with a capital loss
  • Investors will be given the opportunity to reinvest in the fund with new terms for the tenant, taken into consideration any change in costs of financing and rental increases.

In the event this occurs, any dividend income received during the five year period will reduce any overall capital loss.




What happens when the tenant is unable to pay their rent?


For each property, either HomeNow or the tenant take out rental/income protection insurance. This means HomeNow or the tenant will be covered for a period of time rent cannot be paid. During this period, HomeNow will work with the tenant to understand if this is an ongoing issue, or one that will be resolved in the near term. If this is an ongoing issue where HomeNow cannot reach a satisfactory conclusion, we will proceed with serving notice to the tenant who will be required to vacate the property.

In the event of default, the tenant loses all rights to any equity increase in the property and this will be passed to the investor.




What happens if the tenant defaults with positive equity?


Any default will result in the loss of accumulated equity for the tenant. Tenants receive periodic notices of equity increase and the consequence of any defaults on earnt equity. If the tenant defaults, the property will be sold or a new tenant sourced. HomeNow reserve the right to pass all equity accrued to the investor.

Tenants undergo strict vetting prior to entering agreement with HomeNow, including suitable household income and affordability to facilitate property purchase in 5 years. Full details are available upon request.




Can investors withdraw their investment at any time and is this a liquid asset?


No – This is not a liquid investment

Investment is made into a five year closed ended fund meaning the investment term is a minimum of five years. You should not invest unless you accept and understand you will not be able to withdraw any of your principal investment for a full five year period. Dividend income will be distributed throughout the five year term.




What happens if the property is damaged or not appropriately maintained?


HomeNow perform annual checks to ensure the property is being well maintained. If there is damage, the tenant will be asked to make good any damage. In the event the tenant does not wish to purchase the property, it must be returned to HomeNow in the same state as when it was first let (save fair wear and tear). HomeNow hold a one-month deposit in the government registered tenant deposit scheme which may be withheld if the property is found to be in poor condition.

HomeNow believe tenants are better incentivised to maintain the property to the required standard as, if the property increases in value, they will benefit financially. In the event HomeNow has to make good any damages, it reserves the right to deduct these costs from any equity earned.




What is the legal structure of the Fund?


The HomeNow investment manager manages the activities of the Fund on behalf of the investors.

The Fund owns the assets in the underlying properties which are held in a separate company which is a special purpose vehicle (SPV).

The SPV is a limited company incorporated to ensure activities related to the specific assets are isolated from other assets the fund invests in. The SPV is a separate entity with its own assets, liabilities, and legal status. With the HomeNow structure, the SPVs ensure the assets and liabilities of each vehicle are entirely separate to that of the HomeNow fund manager and other SPVs.





THE RETURNS

What are the target HomeNow investor returns?


The target annual dividend is 5.5% net after all fees. Dividends are derived from rental income only. Any capital appreciation will occur at maturity and is not included in the annual target dividend.

If the average house price in the relevant phase increases by 15% the total return after 5 years (which includes target dividends) will be in the region of 30%.

Actual dividends for each phase can be found here and all phases are currently forecast to outperform the target return




Are investor returns net of all taxes?


Investor returns are net of all corporation taxes.

Investors are responsible for the payment of personal tax which may include capital gains and/or income tax. HomeNow do not provide tax advice and investors should seek independent tax advice before investing if unsure of their position. Each company you invest in will be liable for, and pay, corporation tax and any returns you receive will be paid to you net of any corporation tax due. The basis of taxation may change over time.




Why should investors shares one third of any equity upside with the tenant?


HomeNow is a social impact investment fund incorporated to help address the known social issue preventing people from accessing the property ladder due to a lack of deposit.

Investors will also be contributing to help solve this known social issue and, whilst investors are forgoing one third of the capital increase, HomeNow aim to counter this through significantly reduced costs associated with traditional, private buy to let arrangements including maintenance, voids and defaults.

Tenants are strongly incentivised to remain in the property for the five year term and minimise maintenance costs in the expectation that they will be buying the property at the end of the tenancy. In the event the tenant defaults or HomeNow incurs significant maintenance costs, HomeNow reserve the right to deduct these amounts from any equity earned.

HomeNow provides assistance to tenants to deal with certain maintenance costs through the provision of 24 hour home emergency cover. The insurance covers :

  • plumbing and drainage
  • electricity, gas and water supplies
  • Damage to locks and windows and lost keys
  • Primary Heating
  • Pest infestation

HomeNow believes this model will provide greater resilience to unforeseen costs, voids and defaults resulting in more stable returns for investors.




How do HomeNow investor returns remain competitive while giving up one third of any equity increase?


HomeNow anticipates lower maintenance and running cost than traditional buy to let due to the tenants' right to equity being lost in the event of excessive maintenance costs, or defaults. As a result, HomeNow anticipates limited defaults and voids which are also mitigated through income protection insurance.

HomeNow provide 24 hour emergency cover for all tenants using the HomeNow which covers the costs of call out, labour charges and parts for materials. The insurance covers :

  • Plumbing and drainage
  • Electricity, gas and water supplies
  • Damage to locks and windows and lost keys
  • Primary Heating
  • Pest infestation




How frequently are HomeNow dividends paid?


HomeNow dividends are paid on the last business day of each month.





SPECIFIC INVESTMENT RISKS

Can HomeNow seize the underlying assets?


Deeds for all properties are in the name of the underlying, segregated company (SPV) and held by the bank providing the additional, required financing. Income received from the tenant is paid to the segregated company and not the HomeNow investment manager who manages the fund.

HomeNow investment manager is subject to regulation by the Financial Conduct Authority and is not authorised to hold client money.




What happens to the investment if HomeNow experiences financial difficulty?


All investment funds are held in companies (SPV) entirely segregated from the assets of the investment manager. If HomeNow were to experience financial difficulty, there is no recourse to the underlying funds (SPV) and an alternative manager will be sought.




What are the risks/rewards of geared/leveraged investments?


The use of gearing/leverage enhances investor returns by increasing exposure to property price movements. This can be viewed as a positive in a market where property prices are increasing, but it will mean investors will see greater losses if the market falls. This is very common with property investment where banks provide a Loan to Value (LTV) of the value of the property.

The underlying SPV LTV will not exceed 65% of the value of the property.




What happens if a decline in property values result in a realised loss for the investor after five years?


In the event the value of the properties in the underlying funds, including initial costs and property price movement results in a capital loss for the investor, the following will apply:

  • The tenant will not be automatically allowed to purchase the property.
  • The fund will mature with a capital loss
  • Investors will be given the opportunity to reinvest in the fund with new terms for the tenant, taken into consideration any change in costs of financing and rental increases.

In the event this occurs, any dividend income received during the five year period will reduce any overall capital loss.




What happens when the tenant is unable to pay their rent?


For each property, either HomeNow or the tenant take out rental/income protection insurance. This means HomeNow or the tenant will be covered for a period of time rent cannot be paid. During this period, HomeNow will work with the tenant to understand if this is an ongoing issue, or one that will be resolved in the near term. If this is an ongoing issue where HomeNow cannot reach a satisfactory conclusion, we will proceed with serving notice to the tenant who will be required to vacate the property.

In the event of default, the tenant loses all rights to any equity increase in the property and this will be passed to the investor.




What happens if the tenant defaults with positive equity?


Any default will result in the loss of accumulated equity for the tenant. Tenants receive periodic notices of equity increase and the consequence of any defaults on earnt equity. If the tenant defaults, the property will be sold or a new tenant sourced. HomeNow reserve the right to pass all equity accrued to the investor.

Tenants undergo strict vetting prior to entering agreement with HomeNow, including suitable household income and affordability to facilitate property purchase in 5 years. Full details are available upon request.




Can investors withdraw their investment at any time and is this a liquid asset?


No – This is not a liquid investment

Investment is made into a five year closed ended fund meaning the investment term is a minimum of five years. You should not invest unless you accept and understand you will not be able to withdraw any of your principal investment for a full five year period. Dividend income will be distributed throughout the five year term.




What happens if the property is damaged or not appropriately maintained?


HomeNow perform annual checks to ensure the property is being well maintained. If there is damage, the tenant will be asked to make good any damage. In the event the tenant does not wish to purchase the property, it must be returned to HomeNow in the same state as when it was first let (save fair wear and tear). HomeNow hold a one-month deposit in the government registered tenant deposit scheme which may be withheld if the property is found to be in poor condition.

HomeNow believe tenants are better incentivised to maintain the property to the required standard as, if the property increases in value, they will benefit financially. In the event HomeNow has to make good any damages, it reserves the right to deduct these costs from any equity earned.




What is the legal structure of the Fund?


The HomeNow investment manager manages the activities of the Fund on behalf of the investors.

The Fund owns the assets in the underlying properties which are held in a separate company which is a special purpose vehicle (SPV).

The SPV is a limited company incorporated to ensure activities related to the specific assets are isolated from other assets the fund invests in. The SPV is a separate entity with its own assets, liabilities, and legal status. With the HomeNow structure, the SPVs ensure the assets and liabilities of each vehicle are entirely separate to that of the HomeNow fund manager and other SPVs.





GENERAL KEY RISKS

Can HomeNow seize the underlying assets?


Deeds for all properties are in the name of the underlying, segregated company (SPV) and held by the bank providing the additional, required financing. Income received from the tenant is paid to the segregated company and not the HomeNow investment manager who manages the fund.

HomeNow investment manager is subject to regulation by the Financial Conduct Authority and is not authorised to hold client money.




What happens to the investment if HomeNow experiences financial difficulty?


All investment funds are held in companies (SPV) entirely segregated from the assets of the investment manager. If HomeNow were to experience financial difficulty, there is no recourse to the underlying funds (SPV) and an alternative manager will be sought.




What are the risks/rewards of geared/leveraged investments?


The use of gearing/leverage enhances investor returns by increasing exposure to property price movements. This can be viewed as a positive in a market where property prices are increasing, but it will mean investors will see greater losses if the market falls. This is very common with property investment where banks provide a Loan to Value (LTV) of the value of the property.

The underlying SPV LTV will not exceed 65% of the value of the property.




What happens if a decline in property values result in a realised loss for the investor after five years?


In the event the value of the properties in the underlying funds, including initial costs and property price movement results in a capital loss for the investor, the following will apply:

  • The tenant will not be automatically allowed to purchase the property.
  • The fund will mature with a capital loss
  • Investors will be given the opportunity to reinvest in the fund with new terms for the tenant, taken into consideration any change in costs of financing and rental increases.

In the event this occurs, any dividend income received during the five year period will reduce any overall capital loss.




What happens when the tenant is unable to pay their rent?


For each property, either HomeNow or the tenant take out rental/income protection insurance. This means HomeNow or the tenant will be covered for a period of time rent cannot be paid. During this period, HomeNow will work with the tenant to understand if this is an ongoing issue, or one that will be resolved in the near term. If this is an ongoing issue where HomeNow cannot reach a satisfactory conclusion, we will proceed with serving notice to the tenant who will be required to vacate the property.

In the event of default, the tenant loses all rights to any equity increase in the property and this will be passed to the investor.




What happens if the tenant defaults with positive equity?


Any default will result in the loss of accumulated equity for the tenant. Tenants receive periodic notices of equity increase and the consequence of any defaults on earnt equity. If the tenant defaults, the property will be sold or a new tenant sourced. HomeNow reserve the right to pass all equity accrued to the investor.

Tenants undergo strict vetting prior to entering agreement with HomeNow, including suitable household income and affordability to facilitate property purchase in 5 years. Full details are available upon request.




Can investors withdraw their investment at any time and is this a liquid asset?


No – This is not a liquid investment

Investment is made into a five year closed ended fund meaning the investment term is a minimum of five years. You should not invest unless you accept and understand you will not be able to withdraw any of your principal investment for a full five year period. Dividend income will be distributed throughout the five year term.




What happens if the property is damaged or not appropriately maintained?


HomeNow perform annual checks to ensure the property is being well maintained. If there is damage, the tenant will be asked to make good any damage. In the event the tenant does not wish to purchase the property, it must be returned to HomeNow in the same state as when it was first let (save fair wear and tear). HomeNow hold a one-month deposit in the government registered tenant deposit scheme which may be withheld if the property is found to be in poor condition.

HomeNow believe tenants are better incentivised to maintain the property to the required standard as, if the property increases in value, they will benefit financially. In the event HomeNow has to make good any damages, it reserves the right to deduct these costs from any equity earned.




What is the legal structure of the Fund?


The HomeNow investment manager manages the activities of the Fund on behalf of the investors.

The Fund owns the assets in the underlying properties which are held in a separate company which is a special purpose vehicle (SPV).

The SPV is a limited company incorporated to ensure activities related to the specific assets are isolated from other assets the fund invests in. The SPV is a separate entity with its own assets, liabilities, and legal status. With the HomeNow structure, the SPVs ensure the assets and liabilities of each vehicle are entirely separate to that of the HomeNow fund manager and other SPVs.





FEES AND COSTS

Can HomeNow seize the underlying assets?


Deeds for all properties are in the name of the underlying, segregated company (SPV) and held by the bank providing the additional, required financing. Income received from the tenant is paid to the segregated company and not the HomeNow investment manager who manages the fund.

HomeNow investment manager is subject to regulation by the Financial Conduct Authority and is not authorised to hold client money.




What happens to the investment if HomeNow experiences financial difficulty?


All investment funds are held in companies (SPV) entirely segregated from the assets of the investment manager. If HomeNow were to experience financial difficulty, there is no recourse to the underlying funds (SPV) and an alternative manager will be sought.




What are the risks/rewards of geared/leveraged investments?


The use of gearing/leverage enhances investor returns by increasing exposure to property price movements. This can be viewed as a positive in a market where property prices are increasing, but it will mean investors will see greater losses if the market falls. This is very common with property investment where banks provide a Loan to Value (LTV) of the value of the property.

The underlying SPV LTV will not exceed 65% of the value of the property.




What happens if a decline in property values result in a realised loss for the investor after five years?


In the event the value of the properties in the underlying funds, including initial costs and property price movement results in a capital loss for the investor, the following will apply:

  • The tenant will not be automatically allowed to purchase the property.
  • The fund will mature with a capital loss
  • Investors will be given the opportunity to reinvest in the fund with new terms for the tenant, taken into consideration any change in costs of financing and rental increases.

In the event this occurs, any dividend income received during the five year period will reduce any overall capital loss.




What happens when the tenant is unable to pay their rent?


For each property, either HomeNow or the tenant take out rental/income protection insurance. This means HomeNow or the tenant will be covered for a period of time rent cannot be paid. During this period, HomeNow will work with the tenant to understand if this is an ongoing issue, or one that will be resolved in the near term. If this is an ongoing issue where HomeNow cannot reach a satisfactory conclusion, we will proceed with serving notice to the tenant who will be required to vacate the property.

In the event of default, the tenant loses all rights to any equity increase in the property and this will be passed to the investor.




What happens if the tenant defaults with positive equity?


Any default will result in the loss of accumulated equity for the tenant. Tenants receive periodic notices of equity increase and the consequence of any defaults on earnt equity. If the tenant defaults, the property will be sold or a new tenant sourced. HomeNow reserve the right to pass all equity accrued to the investor.

Tenants undergo strict vetting prior to entering agreement with HomeNow, including suitable household income and affordability to facilitate property purchase in 5 years. Full details are available upon request.




Can investors withdraw their investment at any time and is this a liquid asset?


No – This is not a liquid investment

Investment is made into a five year closed ended fund meaning the investment term is a minimum of five years. You should not invest unless you accept and understand you will not be able to withdraw any of your principal investment for a full five year period. Dividend income will be distributed throughout the five year term.




What happens if the property is damaged or not appropriately maintained?


HomeNow perform annual checks to ensure the property is being well maintained. If there is damage, the tenant will be asked to make good any damage. In the event the tenant does not wish to purchase the property, it must be returned to HomeNow in the same state as when it was first let (save fair wear and tear). HomeNow hold a one-month deposit in the government registered tenant deposit scheme which may be withheld if the property is found to be in poor condition.

HomeNow believe tenants are better incentivised to maintain the property to the required standard as, if the property increases in value, they will benefit financially. In the event HomeNow has to make good any damages, it reserves the right to deduct these costs from any equity earned.




What is the legal structure of the Fund?


The HomeNow investment manager manages the activities of the Fund on behalf of the investors.

The Fund owns the assets in the underlying properties which are held in a separate company which is a special purpose vehicle (SPV).

The SPV is a limited company incorporated to ensure activities related to the specific assets are isolated from other assets the fund invests in. The SPV is a separate entity with its own assets, liabilities, and legal status. With the HomeNow structure, the SPVs ensure the assets and liabilities of each vehicle are entirely separate to that of the HomeNow fund manager and other SPVs.





OUR INVESTORS

Who can invest?


HomeNow are authorised to receive investment from Professional and Elective Professional investors. We are unable to receive investment from retail clients. If you have any questions in this regard, please email us on investors@homenowuk.com.




What information do investors need to provide?


Prior to investing money into the fund, HomeNow are required to identify investors. The documentation required depends on whether investors are individuals or a company. There will be an initial discovery call with potential investors to gather high level information in this regard.

Individual investors are required to sign:

  • A Subscription Letter outlining details of the investment
  • Fees and Charges letter confirming their understanding and acceptance of HomeNow's fees
  • A Source of Funds/Wealth Declaration

For corporate investors, specific documentation requirements will be explained following a greater understanding of the company structure.

If you have any specific questions, please contact us on investors@homenowuk.com.




Does HomeNow provide share certificates or legal documents?


Yes. lnvestors receive a share certificate outlining:

  • The number of redeemable shares purchased
  • The price of each share




Is it possible to invest from outside the UK?


Yes. HomeNow will need to discuss this further prior to agreeing to investment as some restrictions may exist depending on the country of domicile.

If you are an overseas resident, or your investment funds originate from outside the UK, please contact us on investors@homenowuk.com so we may obtain further information.





WHAT MAKES HOMENOW DIFFERENT?

Who can invest?


HomeNow are authorised to receive investment from Professional and Elective Professional investors. We are unable to receive investment from retail clients. If you have any questions in this regard, please email us on investors@homenowuk.com.




What information do investors need to provide?


Prior to investing money into the fund, HomeNow are required to identify investors. The documentation required depends on whether investors are individuals or a company. There will be an initial discovery call with potential investors to gather high level information in this regard.

Individual investors are required to sign:

  • A Subscription Letter outlining details of the investment
  • Fees and Charges letter confirming their understanding and acceptance of HomeNow's fees
  • A Source of Funds/Wealth Declaration

For corporate investors, specific documentation requirements will be explained following a greater understanding of the company structure.

If you have any specific questions, please contact us on investors@homenowuk.com.




Does HomeNow provide share certificates or legal documents?


Yes. lnvestors receive a share certificate outlining:

  • The number of redeemable shares purchased
  • The price of each share




Is it possible to invest from outside the UK?


Yes. HomeNow will need to discuss this further prior to agreeing to investment as some restrictions may exist depending on the country of domicile.

If you are an overseas resident, or your investment funds originate from outside the UK, please contact us on investors@homenowuk.com so we may obtain further information.