LANDLORDINVEST has become the first peer-to-peer lender to launch a property-backed Innovative Finance ISA (IFISA).
The platform said investors can earn annual returns ranging between five and 12 per cent per year through its IFISA, which is secured by residential property.
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“This is a historic moment for LandlordInvest and UK savers,” said Filip Karadaghi, LandlordInvest’s chief executive.
“Our property-backed IFISA provides savers for the first time a simple access to one of the UK’s best performing asset classes, residential property, held in a tax-free wrapper.
“Our property-backed IFISA may offer savers higher returns than offered by cash ISAs, and without exposure to or correlation with the volatile stock markets.
“We believe that the property-backed IFISA will broaden the appeal for P2P lending and advance it towards becoming a mainstream asset class.”
LandlordInvest’s borrowers are professional landlords looking to borrow between £30,000 and £750,000 for up to five years, for buy-to-let mortgages. LandlordInvest also provides bridging loans with a maximum term of 12 months. The minimum investment on the platform is £100.
The platform gained full authorisation from the Financial Conduct Authority in early December, following a 24-month application process. On 11 January, it announced that it had been approved as an ISA manager by HMRC.
Although around 18 companies are approved to provide the tax-free wrapper, only three others have launched IFISAs: Abundance, Crowdstacker and Crowd2Fund.
However, LandlordInvest may have competition in the property-backed IFISA space very shortly. Landbay, which also specialises in buy-to-let mortgages, gained ISA manager status earlier this month and is planning on launching its IFISA in February.
P2P lenders are keen to launch their IFISAs before the end of the tax year if possible, as there tends to be an influx of investors keen to take advantage of tax-free returns. The current ISA allowance is £15,240 and is set to rise to £20,000 in the next tax year.