Invest and Fund “relief” at new IFISA rules
Invest and Fund has expressed “relief” at the new rules for Innovative Finance ISAs (IFISAs) following fears that the chancellor could scrap the tax-free investment product.
During last week’s Autumn Statement, Chancellor Jeremy Hunt announced an expansion of the IFISA remit, to include long-term asset funds and open-ended property funds for the first time.
Peer-to-peer property lender Invest and Fund welcomed the new rules, and suggested that they may help to grow the P2P investor base.
“I can assure you that ambassadors of the P2P sector…will have felt a certain sense of relief when seeing that the product will not only continue to develop in the retail market it will also be expanded to include another asset class from outside of P2P, the regulated long-term asset fund,” said an Invest and Fund spokesperson in a blog post to investors.
Read more: The new IFISA rules explained
“This will allow investors to invest in long-term illiquid assets, including real estate.
“Fund managers will sell these products via a unit trust or an open-ended investment company and will serve to provide a regulated alternative for property-backed P2P utilising the same tax wrapper.”
The platform added that these types of regulated asset classes are analogous to P2P, with similar functions but very different structures.
“Rather than competing with a regulated equivalent, it may expand the P2P audience to include a more comprehensive array of sophisticated investors as more and more people become curious about what else they can financially achieve with the IFISA,” the platform spokesperson added.
Read more: Public interest in IFISAs rose 150pc this year
“Interestingly, the one ISA per year limitation that prevented further diversification of portfolios has also been removed, so there now seems to be scope for substantial growth in the next tax year, a complete reversal of the initial murmurings that a slimming down of the available tax wrappers would be on the cards for the sector.”
Invest and Fund also noted that the proposed changes to planning permissions will also help to encourage new growth in the property lending market.
These changes include scrapping planning permission for property owners who wish to convert their homes into two flats, as long as the outside façade remains the same. This could help to bring new homes onto the market, and encourage a wave of property renovation activity.
Read more: Invest and Fund backs IFISA ahead of Autumn Statement