WHEN the loan rate that guides UK lenders is 0.25%, a deal that offers investors a return of 10% is usually treated with great caution.

It is a credit to the marketing skills of  Nicole Bremner, one half of the Hackney property developer East Eight, that she is aiming to give investors a return of 85% on a Dalston scheme.

The crowdfunding scheme to put up four or five storeys for nine flats and some shops or offices on the site of a former youth club offered 280 shares at £5,000 each with the “projected return on investment 85%”.  And the offer, Bremner told Loving Dalston, had been fully taken up: £1.4 million had been raised. 

Asked whether a return of 85%, even as an estimate, wasn’t wildly optimistic at a time of interest rates below 10%, she pointed out that property investment was “highly speculative” but that with high risk “comes high returns”.

She said: ”Our investors must acknowledge their understanding of the fact that they can lose all their capital by investing in this manner.

“This is a normal return for property developments which are highly speculative with no planning in place.”

An online blurb referred to house prices in Hackney having “outgrown every other area in the UK with an increase of 939% over the past 20 years”. It added: “Capital is at risk and returns are not guaranteed.” 

David Altheer 170717

* Backstory: Squatters evicted from Dalston club; Developer submits plans; Big property deal in Dalston; Flats future for controversial Dalston club 

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