BUYING a home from a house builder offplan, ie before it has been built, is increasingly popular and particularly worthwhile in a rising market.
That presumably was the spiel given to investors by the team behind Trading New Homes prior to the firm's recent floatation on the Alternative Investment Market.
TNH is taking advantage of the continued appetite for new listings on the junior market. The listing on January 17 was the sixth on AIM in the first fortnight of this year.
The float was low-key and raised just £2 million, which put a value on the company of £11 million.
The market capitalisation and the vague strategy details provided so far are the reasons behind the initial performance of the share price.
TNH's strategy, known as 'flipping' looks a good idea but the housing market has stopped its runaway rise and prices are merely ambling in some areas and static in others.
Smaller developers that are mortgaged to the hilt and fearing a downturn will flock to TNH. Such companies may provide the best return but are also the most likely to tip into receivership and leave TNH with unbuilt housing developments, which could be costly to complete.
At the opposite end of the spectrum, volume house builders regularly sell to buy-to-let customers and selling to TNH would be no different.
Yet, with such a small pot to play with, judging the market is key and with so little detail about how - and who - will do this judging, the shares look far too risky.