--Rob McGlinchey
Arc Capital & Income is preparing to launch an updated version of its U.K. property investment structure, Bricks and Mortar Plan 4, as investors look to take advantage of the downturn in residential house prices. The plan uses a call option referencing the Halifax House Price Index and features a zero-coupon bond, which matures at par providing 100% capital protection.
Chris Powell, managing director and head of product development in London, told Derivatives Week that the launch comes in response to requests from independent financial advisors to offer an updated product. Arc has already received 50% more applications for version 4 than for Bricks and Mortar Plan 3. Both have a six-year term.
The offer period cannot be fixed until Arc completes its negotiations with a bank to provide security to the plan. In the past it has used Royal Bank of Scotland. Powell said that the new product is well timed as he believes the outlook for house prices is better now than it was three months ago.
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