Returns will be linked to any growth in the Halifax House Price Index (HHPI).
As a five-year structured product, the bond’s return is based on 110% of any growth in the HHPI and has a full capital guarantee, which means provided it is maintained for its full term, the original capital invested will be returned in full, even if the HHPI falls.
The guaranteed property bond has a minimum investment of £1,000 and maximum of £1,000,000 and begins tracking on the 16 March 2007. Any funds invested before this date will receive early-bird interest of 5%.
This bond is also available within an ISA, allowing money to be transferred to tax free savings, or as part of a pension scheme within a SIPP (Self Invested Personal Pension) or SSAS (Small Self Administrated Scheme).
The guaranteed property bond will be available from the 4 December 2006 to 2 March 2007.
About the guaranteed property bond:
· The potential return is based on 110% of any growth in the Halifax House Price Index.
· Closing index values will be an average of the final 12 months – from February 2011 to March 2012.
· Tracking starts on 16 March 2007.
· The bond matures on 16 March 2012.
· Interest is paid on maturity.
· There is a minimum investment of £1,000 and maximum £1,000,000.
· The bond is available within an ISA or within a SIPP or SSAS.
· Exit fees apply for ISA, SIPPs and SSAS versions.
· The bond can be opened either through the branch, online or by post to the contact centre.
· The bond has a minimum age for customers of 18 years.
· Should the HHPI remain unchanged or fall in value, no interest will be received but the customer will receive their original capital back in full.
Steve Urwin, senior executive at Newcastle Building Society, commented: "Newcastle’s guaranteed property bonds have generally appealed to those who do not wish to invest directly in physical property, yet still wish to benefit from any growth in the housing market. SIPP holders looking for an investment where the returns are linked to the residential property market may also find this bond a useful addition to their saving’s portfolio. The added opportunity to invest the bond in an ISA or personal pension scheme makes this product an even more appealing prospect.”
