Following the Russian invasion of Ukraine, increased energy costs and inflation in the headlines, you may ask, ‘what does it all mean for money invested in Bricks?’. It is a good question which we will attempt to answer.
Whilst stock markets offer the potential for high returns, they can also exhibit high volatility. Since we made our first loan in May 2015, the FTSE100 has had several daily moves of 3% or more, including one day of an 11% drop. Similarly, the S&P500 has had several daily losses of 3-4% and the largest single day drop of 12%.
In times of trouble, money tends to leave more volatile assets, such as shares, and goes to ‘safer’ assets such as high-quality bonds and gold. A Bricks loan note is like a fixed rate bond that benefits from the company taking security. With a historical loss ratio over the last seven years of just 0.15% we feel it is a relatively ‘safe’ investment.
Rising inflation tends to be bad for both shares (particularly high growth shares) and fixed rate bonds. However, although government bond prices fall as inflation rises, a Bricks loan is not affected in the same way. Because the interest we pay is so far above that of high grade corporate or government bonds, the value is not affected by relatively small movements in official rates or inflation expectations. As a comparison, the five year UK gilt yield has averaged around 0.75% pa over the last five years and is today at 1.1% pa, compared to a Bricks loan note of between 5% and 7% pa.
Consequently we see Bricks as being a relatively safe haven for cash. The FTSE100 is at the same level today as it was in May 2015, but has given investors plenty of sleepless nights. Bricks loans have returned between 5 and 7% pa, stayed at a constant value, and given peace of mind.
We hope that you find this reassuring. However if you would like to discuss this in more detail, please don’t hesitate to get in touch with us.
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Experience, standing by you
Founded in 2014 with over 90 years of combined property, finance and legal expertise, the Bricks Finance team help local people to access finance easily and quickly by offering bespoke lending using their own funds as well as those from investors.
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What our customers say
Thank you for partnering with us on this project. It's been great to have had a knowledgeable funder who understood the project and allowed us to get on with doing what we do."
John & Sam, Property Development
I wanted a reasonable fixed rate of return with low risk. I like the way my money is combined with money from the other investors, the founders and their families to diversify the risk and to make loans in the South West."
Mrs B, Lyme Regis
It has been fantastic working with you all and we’ve appreciated your advice, support and efficiency throughout."
Vicki and Peter, Property Development
I invested because I trust the people behind Bricks and they are able to give me a much better rate of return than my bank. I like their business model and the way they focus on providing support for local businesses in the region which they know and understand.”
Mr R, Senior Partner with a Global Law Firm
I invested in Bricks over four years ago and have increased my investment several times since. The fixed rate of return is far better than anything available with the high street banks and I like to see where my money is being invested."
Mr A, Exeter
I love the fact that my money is being used constructively on projects throughout the South West and that I can see the tangible benefits that Bricks offers to both borrowers and investors."
We became investors in 2019 and invested more this year because we get a far better rate of interest and regular interest payments.”
Jeff and Karen, Exeter
Congratulations for the help you are giving to West Country businesses and your good stewardship of the investment funds.”
Peter and Gillian, Devon
The final part of my land assembly purchase has now completed. You made the whole financing aspect so easy from start to finish. Thank you all so much."
Ady, Loan For Land
I'm so happy and want to thank you with all my heart - you have enabled me to buy the property of my dreams!"
Chloe, Property Loan
We cannot thank you enough for helping get this over the line and the life-changing opportunities that are now on the horizon"
Jill, Property Finance
Thank you again so much for being completely brilliant. Thank goodness there are people like you, Clive, Will, Jerry and Lyn out there."
Tracey, Home Finance
Personally, I found the service from Bricks 11/10 in every aspect, and I would highly recommend."
Oli, Property Developer
Thank you so much for everything you have done to help us secure this purchase. We are finally looking forward to a good night's sleep now!"
Stuart and Emma, Dream Home Purchase
This would not have been possible without your support and faith in us to deliver the project. Bricks Finance took the time to understand it. It has made an amazing difference to our lives."
Nick, Solar Energy Park
This is our second deal and again we have achieved the first drawdown within 6 weeks from start to finish which is impressive!"
Richard, Finance Broker
Being able to purchase the site would not have been possible without the backing of Bricks."
Darren, Land Purchase
Bricks have given me the support I needed to do this. I couldn’t be happier to see it going up before my very eyes."
Russ, Beach House Development
When the guys from Bricks say they are going to back you they do, and it has been a real pleasure partnering with them on this project."
Matt, Property Development
I was really pleased with how quickly I had access to finance. I would recommend them to anyone looking to raise finance."
Jon, Property Development