Grand Designs star Kevin McCloud's housing firm in liquidation
Grand Designs star Kevin McCloud’s housing firm goes bust and liquidators are called in after small investors lose millions despite promise of ‘healthy’ returns
- Companies in Kevin McCloud’s housing firm network are now facing liquidation
- Grand Designs star encouraged investors to entrust their money to HAB Land Ltd
- The company issued ‘mini bonds’ which raised £2.4million promising annual returns of eight per cent to small investors who put in sums up to £200,000
- A spokesperson for audit, tax, and advisory firm KPMG told MailOnline that liquidators have been appointed to HAB Land Limited and related companies
- ***Did you invest in HAB Land, Hab Housing, or a related company? Do you live in a HAB development? Email [email protected], call 0203 615 4959***
The Grand Designs star personally encouraged investors to entrust their money to HAB Land Limited
Three companies in Kevin McCloud’s property development network have gone into liquidation after investors lost millions in spite of a promise of ‘healthy’ returns.
The Grand Designs star personally encouraged investors to entrust their money to HAB Land Limited – who issued ‘mini bonds’ in 2017, raising £2.4 million.
The five-year bond promised annual returns of eight per cent to small investors, who put in anything from a few thousand pounds up to £200,000.
Mr McCloud wrote that the bond with HAB Land – founded in 2014 to acquire development land for building projects in Oxford and Winchester – would ‘directly fund our schemes and yield healthy returns that are economic, social and environmental.’
But a spokesperson for audit, tax, and advisory firm KPMG said liquidators have been appointed to HAB Land Limited, along with related companies BAH Restructuring Limited and HAB Land Finance plc.
This summer HAB Land Ltd, the land acquisition arm of the business, warned its hundreds of small investors their money might be worth as little as three pence in the pound – and in September it had an attempted financial restructuring rejected by angry bondholders.
HAB Land asked its 2017 cohort of five-year investors for permission to hang on to their money until 2024 and pay zero interest – rather than the promised eight per cent – but investors said no.
James Bennett and David Standish from KPMG were today appointed Joint Liquidators of BAH Restructuring Limited, HAB Land Limited and HAB Land Finance plc.
Building projects in Oxford and Winchester are controlled by two subsidiary companies – which are not part of the proposed liquidation, and HAB Housing Limited, Hab Land’s sister company, is also unaffected.
Grand Designs presenter Kevin McCloud has previously said he would do ‘everything in my power’ to ‘resolve the current situation’
A KPMG spokesperson said: ‘In March 2019, following a period of difficult trading, the directors of HAB Land undertook a comprehensive review which led to the conclusion that they may not be in a position to repay the full amounts advanced from HAB Land Finance.
‘Subsequently, the directors wrote to the bondholders of HAB Land Finance setting out the position and putting forward proposals in order to repay them. These plans were rejected by the bondholders.
‘A meeting of the company’s board of directors subsequently took place on 25 September 2019 where it was resolved that the company was insolvent and should be wound up voluntarily.
‘This was followed by a meeting of the company’s creditors yesterday (15 October 2019) at which a vote was passed to place the company into creditors’ voluntary liquidation.’
In a creditors’ voluntary liquidation, the liquidator acts in the interest of the creditors, not the directors.
Joint liquidator James Bennett said: ‘The directors have reported that higher than anticipated design and project management costs, coupled with delays to the delivery of the sites, resulted in the companies experiencing significant liquidity issues.
Building businesses associated with the Grand Designs star (pictured) found themselves in catastrophic trouble earlier this year – and have now gone into liquidation
‘After being unable to raise further finance or renegotiate existing liabilities, the directors took the difficult decision to instigate liquidation proceedings.
‘This has resulted in a considerable loss to mini bond holders who largely financed the project. An important element of the liquidators’ role, as usual, will be to review the events leading up to the failure of the companies.’
Both building projects in Oxford and Winchester are controlled by two subsidiary companies – HAB at Lovedon Fields Limited and Hab at The Acre Limited – neither of which are part of the proposed liquidation.
‘The directors of these entities continue to explore options to enable these developments to be completed,’ the spokesperson continued.
‘HAB Housing Limited is also unaffected by the liquidation proceedings.’
Mr McCloud is a significant shareholder in the HAB network of companies, remaining a director of HAB Housing and owning 20 per cent of HAB Land’s parent company, BAH Restructuring.
A spokesman for HAB Land had previously said Mr McCloud resigned as a director of HAB Land in February 2018 – and had not been involved in the company for 18 months – but he remained a ‘significant minibond holder’.
Companies House lists Mr McCloud as having resigned from his role of director at Hab Land Ltd.
Kevin McCloud with the Mayor of Winchester, 2017, opening a development in Kings Worthy
HAB Housing, founded by McCloud, had promised eco-friendly developments in Winchester and Oxford would be finished by 2017.
Last month residents in million-pound houses in a development built by HAB Housing complained that two years after it was due to be finished the site was still covered in scaffolding with unfinished pavements and no street lighting.
The Winchester location still had a building site with temporary toilets where the development promised a wildflower meadow and children’s play area.
One woman complained she was informed just last week her bathroom floor would have to be ripped up and leaky pipes relaid.
HAB Land Limited was founded in 2014 to acquire development land for building projects at sites in Oxford and Winchester.
HAB Land Finance plc was subsequently incorporated as a wholly owned subsidiary of the company in 2016, in order to raise finance to fund the real estate activities of HAB Land through Mini Bond Instruments.
*** Did you invest in HAB Land, Hab Housing, or a related company? Do you live in a HAB development? Email [email protected], call 0203 615 4959 ***
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