Today, Landbay announced it has been granted full authorisation from the FCA. It joins a growing group of peer-to-peer (P2P) lending platforms who have passed the regulator’s inspections, providing them with an important stamp of approval, and, perhaps even more importantly, the capability to offer the lucrative Innovative Finance ISA (IFISA) – HMRC status pending.
Founded in 2013, Landbay specialises in buy-to-let mortgages. The P2P platform has facilitated over £42million worth of investments in over 421 loans to UK property borrowers since inception. The platform was pioneering in the P2P industry by having its loan book stress tested and publishing its results – the platform was regarded as having strict credit assessing and underwriting capabilities.
Despite being considered a fairly niche platform when considering volumes lent – significantly less than the billions lent by the “big three” Zopa, RateSetter and Funding Circle – today’s announcement adds to Landbay’s steady evolution, having become a member of the P2PFA, partnered with Zoopla and retained an immaculate 0% default rate.
*Past performance is not a reliable indicator of future performance.
Landbay’s CEO, John Goodall, had this to say:
For the past 14 months we have worked hard, in collaboration with the regulator. As our industry continues to grow and mature, it is only right that regulation should evolve in line, and we welcome the detailed approach the regulator has taken throughout the process. This is a significant milestone for Landbay and we look forward to launching our property-backed ISA before the end of the tax year.
Currently, only a couple of peer-to-peer lending platforms – Crowdstacker and Crowd2Fund – have full FCA authorisation and HMRC plan manager status. This means they can offer an IFISA to investors, providing them with tax relief on P2P investments stored in the tax-wrapper. More recently, however, more and more P2P lenders have gained the adequate FCA authorisation allowing them to move onto the HMRC application – a quicker process, usually taking a matter of weeks.
The Landbay team is confident it will be able to offer the IFISA by April 2017, giving an investor the opportunity to invest their full or partial annual ISA allowance in Landbay’s 3.75% per annum investment product, earning interest on their investment tax-free. A Landbay investor can also transfer old ISA money into their Landbay IFISA with no set limit on the amount.
The annual ISA allowance for 2016/2017 is £15,240. For the 2017/2018 tax year this allowance will increase to £20,000. The allowance can be distributed between available ISAs – Cash, Stocks & Shares and IF ISA – however an investor deems appropriate.
Landbay customers will be hoping the new ISA product launches before the end of the tax year, while onlookers may be encouraged by the tax-efficiency that comes with the risk-adjusted returns on offer and also seek to take advantage of their ISA allowance before it’s too late.
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