THE HOUSE Crowd has launched an Innovative Finance ISA (IFISA), offering its customers a seven per cent return by auto-investing their money into property loans.
The IFISA invests in secured peer-to-peer loans and property development investments, with The House Crowd spreading capital over what the company calls “a diverse portfolio of property loans as far as practicable”.
Users cannot manually select their loans for the IFISA and the money is locked up for a minimum of three years before they can withdraw their funds, and a three month notice period must be given to withdraw or transfer.
The House Crowd requires a minimum investment of £1,000, and new investments can be added to the IFISA in £1,000 increments, up to a maximum of £20,000 across an investor’s entire ISA portfolio, which includes cash and stocks and shares.
In return, investors will get a fixed return of seven per cent a year, paid in October and April.
This is higher than the six per cent annually offered by property investor Safe As Houses in its IFISA launched last week.
Meanwhile, The House Crowd has also launched an auto-invest feature, allowing investors to automate the process of buying loans in their portfolio.
“Essentially every time new money is invested into loans in the auto-invest or ISA portfolio your capital in each loan is proportionately diluted and redistributed, mitigating your risk further,” Frazer Fearnhead (pictured), chief executive of The House Crowd, said.
“Therefore, if something does go wrong with a loan, as it can do, then you will only have a fraction of your invested capital in that one loan. We believe this is a very sensible policy and one that it would be good to follow.”
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