RISK SUMMARY

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Due to the potential loss of invested capital, the Financial Conduct Authority (FCA) considers this investment to be high risk.

What are the key risks?

1. You could lose all the money you invest

• Most investments on this platform;
• are in shares to purchase part ownership of property
• bonds issued to fund development of properties
• bonds issued to fund mortgages of existing properties
• bridge finance investment certificates
• Investors in these shares or bonds or certificates are exposed to losses associated with the property market. This means that you could lose 100% of the money that you invest.
• Certain investments can be held in an Innovative Finance ISA (IFISA). An IFISA does not reduce the risk of the investment or protect you from losses, so you can still lose all your money, it only means that any potential returns could be tax free dependent on your personal circumstances.
• Checks on the properties you are investing in are carried out by the firm however unforeseen issues may arise. You should do your own research before investing.

2. You won’t get your money back quickly

• Even if your investment is successful, it will likely take several years to get your money back.
• You can sell your shares on the London House Exchange Resale Market, ‘the Exchange’; but there is no guarantee you will find a buyer at the price you are willing to sell.
• Another way to get your money back is if the entire property you have invested in has been voted to be sold on the open market by the majority of shareholders. This vote occurs annually and can also take considerable time.
• Dividends are not guaranteed and are based on the properties financial performance. In the worst case scenario, dividends may be suspended.

3. Don’t put all your eggs in one basket

• Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. In a similar vein, we also recommend that investors diversify their investment(s) across multiple properties on the platform.
• A good rule of thumb is not to invest more than 10% of your money in high-risk investments.

4. The value of your investment can be reduced

• In certain situations, properties may require additional funds, raised through the issuing of further shares. Your ownership share of the property that you invested in will decrease if more shares are issued. This would mean that the value of your investment reduces.
• These new shares could have additional rights that your shares don’t have, or may be available at a lower price than you purchased them for, which could further reduce your chances of getting a return on your investment.

5. You are unlikely to be protected if something goes wrong

• Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. Try the FSCS investment protection checker here.
• Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA-regulated platform, FOS may be able to consider it. Learn more about FOS protection here.
• In the event that London House Exchange ran into difficulty, PricewaterhouseCoopers LLP has been pre-engaged to manage the sale of the property portfolio which may result in losses - read more about our Investment Safeguards here.

If you are interested in learning more about how to protect yourself, visit the FCA’s website here. For further information about investment-based crowdfunding, visit the FCA’s website here.