DEMAND for Innovative Finance ISAs (IFISAs) has exceeded platforms’ expectations, with investments continuing to stream in long after the end of the ISA season.
Peer-to-peer lenders that received IFISA manager approval from HMRC before the end of the last tax year told Peer2Peer Finance News that interest in the tax-free wrapper has not tapered off.
“We were one of the first platforms to launch an IFISA into the market before the end of the last tax year,” said Julian Cork, chief operating officer at Landbay.
“We saw a significant spike in volume in March 2017, and have been pleasantly surprised with the ongoing investment flows into our property-backed ISA.
“With cash ISA returns at such a low level, we’ve found that many investors are transferring legacy ISA products from other providers to capitalise on the current 3.75 per cent fixed rate that we offer, and of course the ISA transfer market is not dependent on tax year cut-offs.”
Meanwhile, Proplend chief executive Brian Bartaby said that his property lending platform is “still seeing a steady stream of ISA money coming in” following the end of the ISA season.
“We only released our ISA to existing clients and have seen roughly a 30 per cent take-up,” said Bartaby.
“We have seen a combination of new subscriptions, transfers in of this year’s allowance and transfers in of previous years’ ISA monies.”
Like Proplend, which only opened its ISA to new investors on Tuesday, several platforms have opted to roll out their IFISA to a limited group of investors to start with, to avoid an influx of new money that cannot be lent out straight away.
In February, Lending Works’ IFISA attracted £1.5m of new funds within just 24 hours, due to “unbelievable demand” from investors.