Derbyshire Offers Housing-Linked Bond

by Carla Johnson, Investors Offshore, London

29 May 2007

Isle of Man bank Derbyshire Offshore is offering expat savers a new Offshore Balanced Bond featuring the combination of a market-leading fixed rate of interest on half of their investment, together with any potential returns from UK house price growth on the other half – all without losing their deposit.

Over the past decade, says the Derbyshire, the UK housing market has proved to be among the most buoyant in the world. An average UK property in April 1997 would have cost GBP66,956, a figure which now stands at GBP192,314 – a massive 187% increase.

The new account has been designed for the medium-term saver looking for greater potential for capital growth without any risk to their capital. The initial deposit is split equally between two types of offshore deposit accounts.

The first 50% of the initial deposit goes into a one-year fixed rate account paying a market leading 7% gross/AER.

The rest is invested in a deposit account paying an uncapped return equivalent to 100% of the average rise, if any, in the Halifax House Price Index after five years.

Fiona Passey, Director of Offshore Banking, said: "UK house prices in all parts of the country have exploded over the last ten years, and because of this rapid rise, many people consider property to be one of the best investments you can make.

"Our new Offshore Balanced Bond is an ideal product for UK expatriates who no longer own property in the UK but still want to benefit from the potential returns from investing in the UK housing market.

"Not only does this account offer savers a market-beating rate of interest of 7%, fixed for the first year on half of their initial investment, it also gives savers the chance to benefit from any future growth in the Halifax House Price Index.

"And no matter what happens to house prices, savers will receive all of their initial deposit back, while returns on the HHPI-linked element are currently exempt from EU Savings Tax Directive."

Derbyshire Offshore is a trading name of The Derbyshire (Isle of Man) limited a wholly owned subsidiary of Derbyshire Building Society. Derbyshire Offshore is regulated by the Financial Services Commission on the Isle of Man and is licensed for banking business. In addition to the Isle of Man Depositor Protection Scheme (prescribed in the Banking Business Compensation of Depositors Regulations 1991), Derbyshire Building Society has given an irrevocable and binding undertaking to ensure that, whilst Derbyshire Offshore remains its subsidiary, it will at all times be able to discharge its obligations as they fall due. Their products are primarily designed for non-UK residents who wish to benefit from interest on their offshore investment without deduction of tax.

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