Kevin McCloud, British TV presenter and designer, launched HAB Housing in 2007. (Photo by Jeremy Sutton-Hibbert/Getty Images)
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Hundreds of investors in TV celebrity Kevin McCloud’s eco housing business have been told they may lose up to 97% of their money.
Between 2013 and 2017 McCloud, the presenter of Channel 4’s Grand Designs for over 20 years, launched a series of fundraising schemes for sustainable homes that promised returns of up to 9% a year.
However, those who bought £2.4 million worth of McCloud’s Happiness Architecture Beauty (HAB) mini-bonds in January 2017 were informed they would lose between 74% and 97% of their investment.
The investors recently received a letter from HAB Land Finance which read that after final completion of two HAB projects at Kings Worthy in Winchester and Cumnor Hill in Oxford, “the net return available to bondholders would be expected to range from £606,000 (best case) to £69,000 (worse case).”
The company has proposed a restructuring of the bonds but the investors are not expected to receive their money back until at least 2024.
Other investors, who pumped £1.9 million into one of HAB Housing’s businesses in 2013 and were promised dividends of at least 5% by the end of 2016, told The Guardian they have not yet received any money.
“None of the 650 investors have received a penny in dividends or have even been allowed the opportunity to sell their shares in order to reclaim any of their investment. Many are left feeling angry and betrayed,” a representative of one investor told the newspaper.
Another investor said: “The ethos of HAB (happiness, architecture, beauty) appealed to me, and I had respect for Kevin McCloud’s integrity after years of watching Grand Designs and hearing his views on the power of architecture to change people’s lives… I’m disappointed that what I saw as an idealistic project seems to be collapsing on a sour note, with the original directors having departed and investors seemingly left to bear the entire financial burden of a failed enterprise.”
McCloud told The Guardian he went through “a great deal of heartache and pain” as he tried to find ways to keep his HAB business viable despite delays, large debts and “systemic faults.”
“I stand shoulder to shoulder with those who have lost money,” McCloud said. “I am HAB Housing’s largest single investor and have supported the business financially for 12 years. I will of course do everything in my power to improve the current situation but I cannot discuss anything else at this point because we are, importantly, trying to find a resolution with both the mini-bond investors and the company.”
However, as recently as 2017, McCloud encouraged investors to “join our community of like-minded investors,” promising returns of between 8% and 9% a year.
McCloud funded HAB Housing in 2007 in order to “challenge” the way volume housing in the U.K. is being delivered, with a focus on “environmentally conscious homes, fine architecture and joyful living spaces.”
In 2013, the company broke then world record for crowdfunding investment, after 650 investors invested a total £1.9 million.
The mini-bond scheme was launched in early 2017, raising £2.4 million for a business called HAB Land. Later the same year year, McCloud announced that he intended to raise more than £50 million through another bond for private investors.