thumbnail of Merseyside Assured Homes

Merseyside Assured Homes

Interest rate 13.0% a year
Term 7 years
Total Invested £4.25m
1488  investors
Maturity date 31 Mar 2025
thumbnail of Merseyside Assured Homes

What does the company do?

Merseyside Assured Homes is a project company setup by Octevo Housing Solutions Limited (“Octevo”) to finance and build social housing.

Octevo, 100% shareholder of Merseyside Assured Homes, was set up in 2016 to identify and develop affordable housing using a business model designed to address the core procurement and funding barriers faced by a number of registered social landlords and some local authorities. Rather than requiring them to take on and fund the predevelopment, planning and construction risks and costs, Octevo would take on these costs and build and own the properties in return for a long term lease that should secure long term rental revenues for Octevo. This model is designed to allow private funding to increase the amount of small-scale, quality affordable housing for long-term social use.

Octevo’s objective is to build quality affordable homes that its registered social landlord or local authority partners will lease on a long term basis. In the case of this development, the leases are packaged up with one registered social landlord and will be effective for 50 years. A registered social landlord must abide by the UK’s regulation of social housing, which includes a cap on the amount of rent it can charge for affordable housing. Once the properties are built, the registered social landlord pays a single monthly rental amount in respect of all the homes and will manage the sourcing of, and ongoing relationship with, tenants (usually individuals and families on local authority waiting lists). It will be responsible for the ongoing maintenance of the homes as well as the collection of rent.

Why did the company raise money?

Merseyside Assured Homes raised funding to construct 30 properties across 3 sites. One site is at Simonswood in Kirkby, eight miles north-east of Liverpool city centre and consists of 8 semi-detached and detached 3 bedroom houses and one 4 bedroom house. The second site is at Brook Road in Walton, 4 miles north of the city centre, and consists of 9 flats in a single 3-storey building and will provide supported living accommodation for its tenants. The third site is in St Helens, about 11 miles east of the city centre, consisting of 12 semi-detached and detached 3 bedroom houses.

How does the company expect to repay the investment?

Octevo’s original model to repay investors was to look to sell the long-term rental income from the properties developed by Merseyside Assured Homes (either on its own, or packaged with the rental income from other properties being developed) to a large investor, such as a pension fund. In exchange for an upfront lump sum, the ‘new’ investor receives the rights to the rental income after costs for the remainder of the life of the lease. This upfront sum would be used to repay investors.

How is the company making an impact?

The UK has a shortage of suitable housing and in particular, a shortage of affordable housing available to people on social housing waiting lists. Octevo’s business model is designed to remove the barriers that are constraining registered social landlords and local authorities from delivering the number of new homes needed, and rapidly scale the the access to affordable, and high quality, homes.

Investment status

This investment was originally expected to be repaid on 30 June 2021. However, due to delays in completing the property portfolio, principally due to the knock on impacts of Covid and associated lockdowns, the company was unable to make the repayment and interest payment due on the original maturity date.

With the agreement of investors, the investment was first extended until 31 December 2021 (with the interest rate increasing to 7%) and then further extended to 30 June 2022 (with the interest rate increasing to 10%) to give the company more time. The original directors of Merseyside Assured Homes were unable to deliver their plan within the extended period and Octevo Housing Solutions is now in administration.

The new directors of Merseyside Assured Homes have agreed a further extension to 31 March 2025 (with the interest rate rising to 13%) and are exploring the option of selling the long-term rental income from the Merseyside Assured Homes properties alongside other properties developed by Octevo, or selling the properties themselves once construction is complete. Please see the Updates section for the latest news on the directors' efforts to return money to investors.

The homes at the Simonswood Lane site
The homes at the Simonswood Lane site

Key terms

Issuer Merseyside Assured Homes
Return 13.0% a year
Term period 7 years
Start date 1 July 2018
Maturity date 31 March 2025
Capital repayment Lump sum on maturity
Amount raised £4,250,000.00
Return structure

Interest is paid every 6 months with the capital repaid as a lump sum on the maturity date.

Secured or unsecured Secured It is important to understand that security does not guarantee repayment of your investment or returns.
Security package

This investment has first ranking security over all of the assets of Merseyside Assured Homes under a package of security documents including:

  • a security agreement (including fixed charges and a floating charge) over all of the assets of Merseyside Assured Homes;
  • a share charge over the shares of Merseyside Assured Homes;
  • and a security assignment of contractual rights granted by Octevo over certain documents related to the construction contracts for the building of the homes (for example the architects).
Early repayment options

The company can choose to repay the investment at any point from and including 30 June 2020, subject to paying an early redemption fee equal to half of the interest that would have been due between the early repayment date and the original maturity date, 30 June 2021.

See the Debenture Deed for details of all circumstances in which the option for early repayment may be exercised.

Documents

Debenture Deed
Download PDF The debenture deed sets out the legal agreement and terms for this investment.

Payment schedule

This table gives a breakdown of what is due to be paid back on this investment, based on an example investment of £1,000.

Payment schedule table
Payment date Capital repayment Interest Total
28 December 2018 £0.00 £20.16 £20.16
1 July 2019 £0.00 £19.83 £19.83
27 December 2019 £0.00 £20.16 £20.16
30 June 2020 £0.00 £19.94 £19.94
31 December 2020 £0.00 £20.16 £20.16
31 March 2025 £1,000.00 £504.84 £1,504.84
Total £1,000.00 £605.09 £1,605.09

Updates

These updates tell the story of the investment over its life and include information reported to investors by the company or council behind the investment. The updates are provided for informational purposes only and do not constitute an inducement or invitation to invest. Information provided at the time of publishing may no longer be accurate.

Please read the full update here

Dear investors,

This is a short update from Merseyside Assured Homes to confirm that following the acceptance of our proposal by investors, the funds from the bridging finance partner have started to be drawn down and the work to complete the unfinished properties at Brook Road and Sorrell Way is underway.

Similar proposals to complete the homes were put to investors in the two Debenture offers from our sister company Liverpool Community Homes which respectively funded the Northwood and Huyton developments. No proposal has yet been put to investors in Pax Apartments as the properties are complete and tenanted.

Our proposal was also accepted by investors in the first Debenture from Liverpool Community Homes that funded our Northwood development with work also now underway on site. However, disappointingly, the proposal to investors in the second Debenture from Liverpool Community Homes was rejected by the majority debenture holder. The Huyton development will now likely be sold in its current unfinished state. The impact of this for you is that we will have a smaller portfolio of completed properties across Pax Apartments, Merseyside Assured Homes and Liverpool Community Homes which may be less attractive to buyers of the future rental income which could impact the price they are willing to pay.

We will provide further updates in due course to report on the progress over the anticipated 6 months that we expect these works to take as well as any developments on discussions around the portfolio’s future income sale, or if necessary a sale of the properties.

Yours sincerely,

Directors of Merseyside Assured Homes

Thank you to all those who have voted on the proposal from Merseyside Assured Homes.

In order for the proposal to be agreed, investors holding 75% of the Debentures had to vote in favour of a Special Resolution — this threshold has been met and the proposal has therefore been accepted.

  • In favour: 77.9% (1,025 investors)
  • Against: 0.8% (26 investors)

What happens next?

With the vote passed, the new directors of the company will now look to finalise the process of receiving the new funding and then start work to complete the properties as soon as possible - the full details of the proposal can be found here.

The maturity date for the investment is now 31 March 2025, however funds from either selling the properties or the rental income would be expected to be paid out to investors sooner. Updates will continue to be provided to investors as the process of completing the homes progresses.

The new directors of Merseyside Assured Homes have made available a recording of the webinar held on Wednesday (31 May 2023) for those who were not able to attend on the day.

The directors introduced themselves to investors and provided more detail on their backgrounds and motivations for taking on the role, as well as talking through the current status of the Merseyside Assured Homes properties and their proposal.

You can view the recording here (the passcode to view the webinar if needed is: 7&BBA8zR).

Vote repayment proposal

Merseyside Assured Homes has asked investors to vote on a proposal that would allow the company to:

  1. Take out a new loan to fund the work required to complete the homes at 2 of the 3 property sites.
  2. Once complete, look to sell the homes on the open market or sell the income from keeping them as social housing.
  3. Extend the investment until 31 March 2025. Funds from either option above would be expected much sooner and would be paid out to investors, however the longer extension gives more time to attempt to recover additional amounts from Octevo to repay any outstanding amount.

The new directors of Merseyside Assured Homes believe completing the homes, even with the additional cost of construction and the new loan funding, represents the best route to maximise the amount that is returned to investors. The alternative, selling the homes in their current unfinished state, is expected to return a significantly smaller amount. The proposal sets out the figures and reasons for their recommended approach.

The terms of the investment can only be changed with the approval of investors by voting on a special resolution. In order for the proposal to be accepted, investors holding at least 75% of the debentures must vote in favour.

What do you need to do?

  • Read the proposal from the company which sets out more details about the plan to maximise the amount repaid to investors.
  • Read the Special Resolution which is the legal document you are voting on.
  • Voting has now closed.

Please read the full update here

Please read the full update here

Dear investors,

We apologise that you haven't heard anything from us for a while and nothing since our shareholder Octevo Housing Solutions (Octevo) went into administration. With the company’s previous director Robert Macmaster also declared bankrupt and as the principal individual behind Octevo, it has been taking time to understand the full picture. Jeremy Friedlander, the remaining director, has not been active day to day in the business.

The company has now appointed Rod Black as a director to assist Jeremy given the amount of work that is required across Octevo's subsidiary companies to return capital to investors (he has also joined the board of our sister companies Pax Apartments and Liverpool Community Homes) after a review of the potential conflicts given his other roles at Propifi Capital and Kentish Homes.

We had hoped to give you a much fuller update before year end, including an update on the sale process to Kentish Homes which is yet to conclude. However the administration of Octevo has created added complexities for the group and with only a drip feed of information we are concerned about making statements that subsequently prove to be inaccurate or incomplete. However, we want to assure you that there is significant work going on in the background and that the company is working hard to progress a range of options to generate value for our investors, alongside the efforts of the administrator of Octevo to keep ownership of Octevo's London development in the group to cover any remaining liability to you.

We will be in touch in the new year once we are in a position to give an accurate overview and with our intended plan of action to return as much capital to you as possible, as quickly as possible.

Best regards,

Jeremy Friedlander and Rod Black

Directors of Merseyside Assured Homes Plc

Please read the full update here

Dear investors,

We are sorry for the continued delay in making the payment due to you. We know it is very frustrating given recent indications that it would be imminent, which we communicated to you after we and Kentish Homes thought the grant process was complete and, therefore, we and Kentish Homes had control of the final stages.

It has since come to light that the housing regulator, separately to Homes England but as part of the grant process, also needs to complete its own enquiries and it is behind Homes England. Somehow this was not clear to Kentish Homes' advisor and therefore Kentish Homes was unaware and in turn ourselves.

The legal sale agreement between Merseyside Assured Homes and Kentish Homes has been in final form for several weeks now, so that as soon as the grant funds land, the balance of funding can be released to coincide with simultaneous exchange and completion. Kentish Homes' advisor has raised no concerns with the grant application process and doesn't expect it to take much longer. However, there is no particular urgency for Homes England, unlike our increasingly pressing wish to pay you back what we can from this sale. Kentish Homes is not able to get any commitments from Homes England on when it will be completed, but they are led to believe it should be a matter of weeks rather than anything longer. From what Kentish Homes can understand of the grant process, although it is very slow — it has already taken several months — it has been running smoothly.

As soon as Kentish Homes has a better indication of the timing of the grant, we can agree a completion timetable with them and communicate it to you. In the meantime, your investment remains outstanding and is accruing additional interest at 10% + 3% penalty interest. While we are limited in what we can do to speed up the process, we will be doing everything we can to complete the property sale and return funds to you as soon as possible.

Kind regards,

Robert Macmaster

Director of Merseyside Assured Homes

Kentish Homes has still not been given a date by Homes England for payment of the grant. It is working with its advisor for an update and as soon as one is available it will advise Merseyside Assured Homes which in turn will advise investors.

Merseyside Assured Homes is waiting on the completion of the sale of its properties to go through before it can make the payment to investors. It is in the final stage of completing the sale of its properties to Kentish Homes.

With all documentation now agreed, exchange of contracts and completion will likely happen on the same day, however that has not yet happened. As soon as Kentish Homes receives the grant funds from Homes England, the sale can complete with the funds passed to Merseyside Assured Homes who in turn can make the payment due to investors. Once Kentish Homes is given a payment date by Homes England, Merseyside Assured Homes will update investors on when it expects to make payment to them.

Please read the full update here

Please read the full update here

Please read the full update here

Thank you to all those who voted on the proposal from Merseyside Assured Homes - voting has now closed.

As a reminder, the proposal was to extend the maturity date by a further 6 months to 30 June 2022, and increase the interest rate from 7% p.a. to 10% p.a. for the period between 1 January and 30 June 2022. The proposal can be found here.

In order for the proposal to be agreed, investors holding 75% of the Debentures had to vote in favour of a Special Resolution. This threshold has been met and the proposal has therefore been accepted. In total 1,194 investors holding 77.4% of the Debentures have voted in favour of the Special Resolution, with 17 investors holding 1.6% of the Debentures voting against.

With the proposal accepted, the investment has been extended and the schedule of interest payments has been updated in your Abundance account. Merseyside Assured Homes will continue to provide investors with updates on the progress towards raising the funding required to repay investors.

Please read the full update here

Merseyside Assured Homes has asked investors to vote on a proposal to extend the investment. Therefore trading of this investment has been suspended.

Please read the full update here

Merseyside Assured Homes opened for investment today.

Thank you to all those who voted on the proposal from Merseyside Assured Homes - voting has now closed.

As a reminder, the proposal was to extend the maturity date to 31 December 2021, and increase the interest rate from 4% p.a. to 7% p.a. for the period between 1 July and 31 December 2021. The company has the option to repay you at any point within this extended period. The proposal can be found here.

In order for the proposal to be agreed, investors holding 75% of the Debentures had to vote in favour of a Special Resolution. This threshold has been met and the proposal has therefore been accepted. In total 1,265 investors holding 84.3% of the Debentures have voted in favour of the Special Resolution, with 7 investors holding 0.6% of the Debentures voting against.

With the proposal accepted, the investment has been extended and the schedule of interest payments has been updated in your Abundance account. You will be able to list the investment for sale on the marketplace again shortly once the legal process has been completed.

Merseyside Assured Homes will continue to provide investors with updates on the progress towards raising the funding required to repay investors.

Please read the full update here

Please read the full update here

Please read the full update here

An investment return from Merseyside Assured Homes was paid today.

Please read the full update here

An investment return from Merseyside Assured Homes was paid today.

The homes started to be built in November 2018 and we hoped that they would be completed by November 2019. Unfortunately, delays due to utility service installations and highway matters meant that they were not quite finished by March 2020 when Covid-19 constraints took effect. Since March, the contractors are still operating under the restricted Covid-19 and Health and Safety guidelines for the protection and safety of all staff and site workers which has resulted in a reduction in workers that are allowed on site at any one time. We have subsequently phased all working areas in order to accommodate the guidance and provide schedules as to which trades and service workers can attend the site at any given time.

The local authorities and outside contractors are also slowing up the process resulting in longer waiting times - especially in relation to utility connections and highway works which further disrupted our programme as these essential services are required in order to achieve the necessary certificates for occupation. We anticipate that by the end of July two thirds of all the units will be completed with the remainder by September 2020, subject to council approved contractors fulfilling their obligations. We fully intend to arrange for viewings in July and so tenants will be moving in during August.

These delays mean that, as the homes are uninhabited, we have not had any revenue from the project as we expected when the offer to you was made. This means that in order to pay interest now we are having to use money from the cash reserve. This reserve will, under the terms of the debenture deed, need to be replenished during the next 6 months. We intend to do this by December 2020.

Since the lockdown started we have had to put a halt to works on our construction sites. Currently construction is still frozen due to unavailability of material supplies and workers are understandably unwilling to risk social contact until the scale of the virus spreading is reduced. Our contractors are drawing up plans for a reduced and staggered return on some trades as long as social distancing and protective measures are put in place. How quickly we can restart is unclear as we await details of how the lockdown restrictions will be lifted.

The contractor is looking at a possible skeleton staffing for a return a week today to start on at least one site where safe distancing can be achieved without compromising their workers safety. They are consulting with their Health & Safety executive on all the protective measures to ensure that all guidelines are followed.

Prior to the official lockdown we had 27 tenants identified for interview to live in our finished homes, sadly we only managed to see 4 of them before lockdown. There are a number of prospective tenants wishing to put down rent deposits but, until lockdown is relaxed, interviewing cannot be conducted safely. We still anticipate strong demand for our homes, so once conditions allow interviews will be resumed.

This sums up the current situation for Octevo and its projects, and updates on any further developments will be provided accordingly.

To date (25th March) we have been able to continue to work on the various sites we are developing but are now seeing things grind to a halt and so are expecting some delays. At this point it is not possible to draw any conclusions, but we hope the delays will be only a matter of weeks.

On our construction sites, contractor availability has been decreasing due to illnesses, travel restrictions, availability of equipment and supplies and for health & safety reasons. Builders merchant’s and plant hire companies are closing which will have knock on effects on the wider construction industry. We are able to continue work on a few minor and essential jobs but will have to delay most of the work.

For properties that are finished, we are having to stop doing viewings because potential tenants are no longer attending scheduled ones and the Councils are suspending new viewings for the time being.

These are unprecedented and uncertain times but beyond the COVID-19 crisis the continued and growing need for social and affordable housing remains – so we will continue to do our best to help meet that demand. We will continue to follow government guidance and strive to get back on track where it’s safe to do so and keep you updated of any material developments.

Please read the full update here

An investment return from Merseyside Assured Homes was paid today.

Please read the full update here

An investment return from Merseyside Assured Homes was paid today.

Please read the full update here

An investment return from Merseyside Assured Homes was paid today.

This investment closed today.

Merseyside Assured Homes opened for investment today.