The collapse of micro-homes developer Inspired Homes has culminated in unsecured creditor claims of £12.3m, an administrator’s report reveals.
Small capital equity investors have been burned by the office-to-resi developer, which promised yields of 12-14%, paid monthly.
The company targeted high-net-worth and self-certified sophisticated investors with high returns on bonds and loans, the majority of which were backed by founder and chief executive Martin Skinner.
Inspired used permitted development rights to convert old office buildings into blocks of micro-flats in locations in outer-city locations including Croydon, south London, and Manchester.
Skinner touted sales values north of £1,000 per sq ft for the homes, which averaged at 30 sq m.
But development delays and poor sales squeezed profits, leading the company to default on interest payments to investors in June.
Investors had opted to appoint administrators to protect their assets but this was fast-tracked after Skinner was jailed for 22 months when he crashed his Porsche.
On 30 August joint administrators at MHA MacIntyre Hudson were appointed.
MHA has instructed Lambert Smith Hambert to value Inspired’s assets and provide advice on the sites. It has also launched an investigation into “business relationships and transactions”.
The company owes £6.5m in unsecured bonds and £3.5m in loans to various small-scale investors. There is a £400,000 loan claim for PM Vanguard and £400,000 owed to Sandvall AM.
Inspired also owes more than £100m in charges secured against its assets.
At its landmark Innova scheme in Croydon (pictured), it owes £53.3m to Bentall Green Oak, EG Real Estate and Gemini Credit Investments. The development has been seized by second charge holder EG Real Estate.
Joint venture partner Equinox took control of the development at Lime Tree House in Witham, Essex, when Inspired breached the agreement. Creditor Gemini Credit Investments took control of 78-home The Broadway in Crawley, West Sussex.
Receivers had previously appointed by creditors including Octopus and administrators on behalf of P2P lender Amiscus backing schemes in Farnborough and Wolverhampton.
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