25 January, 2017

LandlordInvest Launches 1st Property-backed IF ISA

LandlordInvest launched the UK's first property-backed Innovative Finance ISA (IF ISA) today. After a long and arduous two-year process becoming fully authorised and HMRC approved - the latter occurring on 11th January - the peer-to-peer (P2P) lender, who facilitates investment in professional landlords, sets a precedent with its IF ISA. However, competition surfaces in the form of buy-to-let mortgage specialist, Landbay, who was recently HMRC approved as an ISA plan manager and will launch its ISA product before the end of the tax year.

LandlordInvest’s property-backed IF ISA lets investors invest up to £15,240 in the current tax year (rising to £20,000 in the next tax year) in P2P loans secured by residential property, and with the ability to earn tax-free returns between 5% and 12% per annum. It is the first property-backed IF ISA of its kind made available to UK retail investors. As ISA season looms, it could be a useful diversification tool providing attractive risk-adjusted returns, uncorrelated to the stock market.

*Peer-to-peer lending is not covered by the Financial Services Compensation Scheme (FSCS), there is a risk to investor' capital.

Filip Karadaghi, LandlordInvest’s Chief Executive said:

This is a historic moment for LandlordInvest and UK savers. Our property-backed IFISA provides savers with the first opportunity to access 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 peer-to-peer lending and advance it towards becoming a mainstream asset class

Read more: LandlordInvest Receives HMRC ISA Approval: An Interview With the CEO

With the end of the tax-year looming, investors will be encouraged by the introduction of a new Innovative Finance ISA onto the market. Since the new ISA product's full launch on April 6th, 2016, expectations have not been fulfilled: Crowdstacker and Crowd2Fund have been the only true peer-to-peer lending platforms capable of offering the IF ISA in the past nine months. In saying that, recent months have seen a number of platforms receive full authorisation and HMRC approval - the regulator finally has a streamlined process in place it appears; an exciting prospect for the larger UK platforms like Zopa, RateSetter and Funding Circle.