'I’m still owed £250,000 from a failed investment' 

More cases are emerging of savers who have lost life-changing sums after investing in a £45m unregulated property bond, a year after Telegraph Money first revealed concerns about the scheme.

Last year we reported on how 89-year-old Sheila Jeffryes lost £67,000 after her financial adviser invested in bonds issued by London Property Holdings, an offshore registered property developer.

Because her adviser’s firm went bust, she could only claim £50,000 of her £117,000 investment, the maximum compensation paid by the Financial Services Compensation Scheme.

Since then, several other readers have reported being caught up in the same scheme.

The last correspondence received by investors from London Property Holdings confirmed the five-year bonds were now not accessible until 2021. The original lock-in period was due to end in September 2017.

The case has reignited calls for financial advisers – who are regulated by the Financial Conduct Authority – to be banned from selling unregulated investments, which do not have the same level of scrutiny.

Hugh Montgomery, 70, has fought a long-running battle with two financial advisers over £400,000 he invested in the scheme.

The former accountant reached a High Court settlement with Timothy Eddolls and Anthony Smith in September 2014 in which it was agreed London Property Holdings would meet Mr Montgomery’s £45,000 legal fees and return his £400,000 investment.

This was to be made in monthly instalments, with a £280,000 “balloon payment” scheduled to be paid in September of last year. 

However, after receiving £92,000 in instalments, the payments stopped last summer. Earlier this month he received £50,000 from the FSCS after the collapse of Portland Financial Management, the now-defunct advice firm where Mr Eddolls and Mr Smith were previously directors and which had given him the advice to invest. 

That still leaves him nursing losses of a quarter-of-a-million pounds. Mr Montgomery has hired lawyers to chase London Property Holdings for the outstanding £250,000 he is owed.

During a successful career at several large companies, he built up a buy-to-let portfolio before severe ill health forced him to sell up and be signed off work. He and his wife have been left living in rented accommodation on the south coast.

He said: “I’ve lost my house and we’ve got about £150,000 of cash left to survive on until we die – it’s not what I’d planned.”

Chris Rodda, a partner at Royds Withy King, a law firm, said: “We have been consulted by a number of individuals affected by the collapse of Portland, whose investments ended up in London Property Holdings.”

Mr Rodda added the case echoed others the firm had worked on where it was thought the Financial Conduct Authority (FCA), the City watchdog, could have intervened earlier.

He said: “One feature noted was the suggestion the FCA seemed to fail to inform investors when they investigated Portland, so as to enable action be taken until it was too late.

“This is a situation we have noted in other cases. Investors need to take care choosing advisers, given the limits of statutory compensation.”

Kerry Nelson, a financial adviser at Nexus Independent Financial Planners, is helping several people worried about London Property Holdings investments. 

Her clients have not received any updates from the firm after investors were told their money was locked up for a further four years.

Both Ms Nelson and Telegraph Money have made repeated unsuccessful attempts to contact London Property Holdings. Telegraph Money did reach Mr Eddolls, but he declined to comment.  

A spokesman for the FCA said rules prevent it disclosing information while its investigations are ongoing.

There is a risk investors rush to withdraw their money, which could in turn lead to the collapse of firms before any wrongdoing has been proved, he added.