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Peer2Peer Finance News | April 25, 2019

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New IFISA launches highlight popularity of property-backed P2P loans

New IFISA launches highlight popularity of property-backed P2P loans
Kathryn Gaw

A SLEW of new property-backed Innovative Finance ISA (IFISA) launches has underlined the growing popularity of peer-to-peer property lending.

These include Property Partner’s property development IFISA, Propio’s development and refurbishment IFISA, and Loanpad’s property-backed ‘hybrid’ IFISA.

In March, Money&Co helped one of its borrowers – Grounds Investment – to bring to market a property-backed IFISA which provides loans for residential developments in major German cities.

Meanwhile, the recently-launched Westway IFISA aims to solve the problem of the under-served supported housing sector by offering an alternative source of funding for developers, while targeting 8.5 per cent in annual returns for investors.

Read more: Five ways to add IFISA diversity

The growth of the P2P property market has coincided with a slowing in the traditional lending market, as well as an ongoing shortage of housing across the UK. This has encouraged borrowers to seek out alternatives to the banks, while investors are attracted to the asset-backed returns which can be made within the tax-free IFISA wrapper.

“Traditionally, property development projects of this scale have been funded by banks and institutional investors,” said a Westway spokesperson. “But our IFISA offers smaller private investors the opportunity to invest in large-scale projects in the UK housing market.”

This article featured in the April issue of Peer2Peer Finance News, now available to read online