Imagine Homes

Infobox Company
company_name = Imagine Homes Ltd
company_
company_type = Limited company
foundation = 2003
location = Farnborough, UK
key_people = Grant Bovey, CEO
industry = Buy-to-let Investment Property
homepage = [http://www.imaginehomes.co.uk www.imaginehomes.co.uk]

Grant Bovey's company has ridden the rise in property prices in the UK. Concerns have now been raised about it's sustainability in the wake of falling house prices. There is concern that the 'rental guarantees' offered are unfeasible if the company ceases to trade, and paid for not by actual rental levels achieved but the capital gained on the initial sale. As such the reversion when the rental guarantees expire might be significantly less than quoted.

Comparisons have been made between the company and defunct Inside Track. While Imagine Homes does not make money from seminars, the model of acting as a middle man between residential developers and heavily geared end purchasers has similarities.

In September 2007 the Daily Telegraph reported that a proposed IPO by Imagine Homes had been abandoned. Instead the business was recapitalised by a £37.5m equity-and-debt injection from HBOS. The floatation plans were put back until 2009 at the earliest. The decision to pull the floatation was caused by

• Significant softening in the business’ main market, the sale and rental of new build residential property. The business model of Imagine Homes depended on “Buy to Let” investors feeling confident enough in price rises to buy property with the expectation of rising property prices and rent high enough to cover their costs.

• The correction of a prior year accounting errors in the company’s report and accounts which had resulted in the overstatement of revenues. After correction of the error, the reported losses before tax had more than doubled to £6.42m in the year to March 2007 compared to £2.81m for the previous year.

• Weakening equity markets would not have helped the floatation of an investment prospect linked to the property market.

HBOS, as part of their refinancing, asked for improved Corporate Governance within Imagine Homes. They recruited two non-executive directors to the board.

External links

* [http://www.imaginehomes.co.uk/ Official website]
* [http://www.propertyweek.com/story.asp?sectioncode=297&storycode=3117557/ Property Week]