The content of this website has not been approved by an authorised person within the meaning of the Financial Services and Markets Act 2000. Reliance on this promotion for the purpose of engaging in investment activity may expose an individual to a significant risk of losing all of the property or assets invested.
Before investing in property-backed bonds, it is essential you understand the specific risks involved. We believe in full transparency so you can make informed decisions.
Your capital is at risk. Property bonds are not covered by the Financial Services Compensation Scheme (FSCS). You may lose some or all of the money you invest. You should not invest money that you cannot afford to lose. Please seek independent financial advice if you are unsure whether bond investment is suitable for you.
All bond investments carry risk. Below we outline the principal risks specifically associated with investing in Smart Legals property bonds.
When you invest in a property bond, your capital is at risk. Unlike a bank savings account, your money is not held in a deposit-protected account. The return of your capital depends on the performance of the underlying property assets and the borrower's ability to repay the loan.
If property values fall significantly or the borrower defaults on their obligations, you may receive back less than your original investment, or in a worst-case scenario, lose your entire investment.
Property bonds issued by Smart Legals are not covered by the Financial Services Compensation Scheme (FSCS). Unlike bank deposits protected up to £85,000, there is no government-backed safety net for bond investments.
If Smart Legals or the borrower is unable to meet their obligations, you will not be able to claim compensation through the FSCS. This is a fundamental difference from traditional savings products and should be carefully considered before investing.
Property bonds are fixed-term investments, typically lasting 2 or 4 years. During this period, your capital is locked in and cannot be withdrawn early. There is no secondary market for these bonds, so you cannot sell your holding before maturity.
You should only invest funds that you will not need for the full duration of the bond term. If your circumstances change, you will not be able to access your money early.
The repayment of your capital and interest depends entirely on the borrower's ability to meet their obligations. If the borrower experiences financial difficulties, they may fail to make interest payments or repay the principal on time.
While a security trustee holds a legal charge over the property assets, enforcing this security is a lengthy and costly process. Recovery of funds is not guaranteed and may result in a return that is less than your original investment.
Property bonds offer a fixed rate of interest. If market interest rates rise during the bond term, the fixed return may become less competitive compared to other available products. Your capital remains locked in at the original rate.
Similarly, if inflation exceeds the bond's interest rate, the real value of your returns and capital may be eroded over time, meaning your investment could lose purchasing power in real terms.
Changes to financial regulation, tax legislation, or government policy could affect the returns on your bond investment or the way these products are structured. Such changes could be introduced at any time and may apply retrospectively.
Bond interest is typically subject to income tax. Changes in tax rates or the removal of tax reliefs could reduce your net returns. You are responsible for declaring bond income to HMRC and paying any tax due.
We encourage all investors to fully understand the risks before committing capital. Contact our team or seek independent financial advice.