Control of risks is essential in any investment activity; it forms an integral part of the search to improve performance. We make it our number 1 priority.
Risks inherent in the market
Despite the current stability of the English property market, it remains volatile in the same way as any other product.
For information, UK property prices fell by 12% during the financial crisis of the 1990s, and by 19% during the 2008 financial crisis.
To overcome this, the assets of Homes of England are able to withstand a very steep drop in the market.
|May 2014||May 2015||May 2016|
|Net assets (£)||1,805,000||7,435,000||21,700,000|
|Highest drop on the market bearable||44.57%||27.95%||34.89%|
In order to create a still higher safety margin, Homes of England is keeping part of its portfolio aside to create long-term revenue, and sells off a significant proportion of its assets after adding value to them, in order to minimise its exposure to market hazards.
Each project is managed exclusively by a subsidiary of Homes of England.
This helps us limit any negative impact that any one project may have on the structure as a whole.
All subsidiaries of Homes of England share all profits with our principal partners. Today, Homes of England has a holding of 50% of each subsidiary.
Risks linked to construction
Most of our projects are conversion works, which do not affect the structure of the properties purchased.
Risks linked to building permits
Since May 2013, we have been able to purchase properties that will be granted automatic and certain permits. Current legislation eliminates this risk.
The search for finance is an integral part of every activity.
Working with tried and trusted investors who have faith in our activity is essential for us.
Risk linked to human resources
Limiting this risk starts with a choice upstream. The company wants to bring together a team of experts with shared visions and values. However, we divide the risk into two sections:
Operational risks: administrative management, management of turnover.
Strategic risks: management of key people, social dialogue.
The risk that the counterparty will default without paying his debts.
Example: non-payment of rent on an apartment.
This risk is limited because of the large number of properties that Homes of England possesses.
Constraints and limitations
Legislative / regulatory
We master this risk by working in both sterling and euros.
We take out insurance on substantial loans in euros.