Risk Warning
Important information about property investment risks
Envy Capital is a property sales business, not a regulated investment platform or financial services provider. We sell shares in special purpose vehicle (SPV) limited companies that own individual properties. This service is not regulated by the Financial Conduct Authority (FCA).
What This Means:
- You are purchasing shares in a company that owns a property — you are not buying the property and you are not registered on its title
- Your rights are shareholder rights against that company, not property rights
- You do not benefit from FCA consumer protection or FSCS compensation
- Standard property law and consumer protection law applies
- We do not provide financial advice or investment recommendations
Professional Advice Required: You should seek independent legal and financial advice before purchasing SPV shares to understand the risks and implications.
Property-Specific Share Structure
When you purchase through Envy Capital, you are buying shares in the SPV limited company that owns one specific property. This is not a pooled investment fund, and it is not direct ownership of the property — the company holds legal title and you hold shares in the company.
How Property-Specific Shares Work
- One Company Per Property: Each property sits in its own SPV with its own share structure. Your shares relate only to that one company
- Share Calculation: Each £1 you spend equals 1 share in that specific SPV. For example, a property valued at £500,000 has 500,000 shares available
- Company Reserve Per Property: For each property, 30% of shares are reserved for Envy Capital for management and governance
- No Dilution Across Properties: When Envy Capital acquires a new property, it creates a new, separate pool of shares. Your existing shares in other properties are NOT diluted
- Individual Shareholding Limit: No single person may hold more than 25% of shares in any individual SPV
Investment Term and Liquidity
Important: All share purchases are subject to specific terms and restrictions:
- 5-Year Minimum Term: Each purchase has a minimum holding period of 5 years. This commitment applies to each individual purchase separately
- Early Exit Available: You can request to sell your shares to Envy Capital at any time, but must give 3 months notice and may incur an early exit fee
- Company Right of First Refusal: Envy Capital has first right to purchase your shares before you can sell to anyone else
- Limited Liquidity: There is no guarantee you can sell when you want or at the price you want, even with the buyout provisions
- Company Buyback Rights: Envy Capital can require you to sell your shares back to the company with 3 months notice
New Property Acquisitions
When Envy Capital acquires a new property:
- A new share pool is created based on that property's valuation
- These are entirely separate shares from existing properties
- Your ownership percentage in existing properties remains unchanged
- Your share value in existing properties is not affected
- You may choose to purchase shares in the new property separately
Returns Distribution
Rental income is distributed based on the specific property generating that income. If you own 1% of Property A and 2% of Property B:
- You receive 1% of Property A's rental income (after fees)
- You receive 2% of Property B's rental income (after fees)
- Each property's performance affects only the shareholders of that specific property
What This Means For You
- You are buying shares in companies that own specific properties, not the properties themselves
- Your shareholding percentage in each SPV you hold remains fixed
- New property acquisitions do not dilute your existing holdings
- Each property operates independently through its own company and share structure
- Envy Capital retains at least 30% of the shares in each SPV and controls its management
- You have no management rights - Envy Capital manages all properties
Loss of Capital
Property investment carries significant risk. You may lose some or all of the money you invest. The value of properties can fall as well as rise, and there is no guarantee that you will receive any return on your investment or recover your initial capital.
Not a Deposit
Investments in property are not deposits and are not protected by the Financial Services Compensation Scheme (FSCS). Unlike bank deposits, your investment is not guaranteed and you could lose money.
Illiquidity
Property investments are illiquid. You may not be able to sell your investment when you want to, and if you do find a buyer, you may have to sell at a significant discount to the original purchase price. Your money may be tied up for an extended period.
No Guaranteed Returns
Projected returns are estimates only and are not guaranteed. Actual returns may be significantly lower than projected, or you may receive no returns at all. Past performance is not a reliable indicator of future results.
Property Market Volatility
Property prices can fluctuate significantly due to economic conditions, interest rates, supply and demand, government policy changes, and local market factors. Values can fall substantially and rapidly.
Rental Void Periods
Properties may experience periods without tenants (void periods), during which no rental income is generated. Extended void periods can significantly impact returns and may result in losses.
Tenant Default
Tenants may fail to pay rent, damage property, or breach tenancy agreements. Recovery of unpaid rent and eviction processes can be costly and time-consuming, negatively affecting returns.
Property Maintenance and Repairs
Properties require ongoing maintenance and may need significant repairs. These costs can be substantial and unpredictable, reducing or eliminating returns. Major structural issues could result in significant losses.
Regulatory and Legal Changes
Changes in property legislation, building regulations, safety requirements, taxation, and planning laws can adversely affect property values and rental income. Compliance costs may be substantial.
Platform Risk
If Envy Capital ceases operations or becomes insolvent, you may lose access to your ownership information and may face difficulties selling your shares. The platform's continued operation is not guaranteed.
Company-Level Risk: Because the property is owned by an SPV company rather than by you, you also carry that company's risks. If an SPV incurs debts, liabilities or legal claims, those rank ahead of shareholders, and in an insolvency shareholders are paid last and may receive nothing even where the property itself holds value.
Liquidity and Exit Risks
Shares in an unlisted property SPV are highly illiquid with significant exit restrictions:
- 5-Year Lock-In: Your capital is committed for a minimum of 5 years per purchase
- Early Exit Penalties: Early buyouts may incur fees of up to 5% of share value
- 3-Month Notice Required: You cannot access your capital immediately - minimum 3 months notice required
- Buyout Price Risk: Buyout price based on valuation at time of notice, which may be lower than your purchase price
- No Guaranteed Buyout: While Envy Capital commits to buyout provisions, company liquidity issues could delay or prevent buyouts
- No Secondary Market: Cannot sell to third parties without company approval
- Company First Refusal: Envy Capital controls all share sales through right of first refusal
- Forced Buyback Risk: Company can force you to sell your shares with 3 months notice
Warning: Do not invest money you may need access to within 5 years. Even with buyout provisions, your capital may be inaccessible when you need it.
Minority Shareholder Limitations
As a minority shareholder with limited control, you have no power over:
- Property management decisions
- Property maintenance and improvements
- Rental pricing and tenant selection
- When to sell the property
- Management fee structures
Envy Capital controls each SPV and makes all operational decisions, regardless of the size of your shareholding.
Lack of FCA Protection
This service is not regulated by the Financial Conduct Authority. You do not benefit from:
- Financial Services Compensation Scheme (FSCS) protection
- FCA conduct of business rules
- Access to an external ombudsman scheme for investment complaints
- Regulatory oversight of investment advice (we do not provide this)
Legal Structure Complexity
Holding shares in an unlisted company may create complications with inheritance, divorce proceedings, bankruptcy, or disputes. Seek legal advice before purchasing.
Interest Rate Risk
Rising interest rates can reduce property values and decrease demand for rental properties. Properties are bought outright with cash and are never mortgaged, so there are no borrowing costs, but wider rate movements can still push values and rents down.
Inflation Risk
Inflation can erode the real value of rental income and property values may not keep pace with inflation, resulting in a loss of purchasing power.
Tax Changes
Changes in taxation (including income tax, capital gains tax, stamp duty, and property-specific taxes) can significantly impact returns. Tax treatment depends on individual circumstances and may change.
Currency Risk
If investing in properties outside the UK or if you are based outside the UK, exchange rate fluctuations can affect the value of your investment and returns when converted to your home currency.
Suitability
This is not suitable for everyone. You should only use money you can afford to have tied up long-term and should ensure property forms only part of a diversified asset portfolio.
Due Diligence
You should conduct your own due diligence and carefully review all property information, legal documentation, and financial projections before purchasing. Independent legal and financial advice is strongly recommended.
Ownership Timeframe
Each purchase carries a 5-year term, with a break point at 3 years. You should be prepared for your capital to be inaccessible for that full period, and potentially longer if a sale cannot be completed when you ask for one.
Professional Advice
This risk warning does not constitute legal, financial, or tax advice. You must seek independent professional advice before purchasing shares. Consider consulting:
- A solicitor specializing in property law
- An independent financial adviser
- A tax specialist or accountant
Not Investment Advice
Envy Capital does not provide investment advice or financial advice. We are a property sales business. Any information on our platform is for informational purposes only and should not be considered a recommendation to purchase.